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Muscle Memory of a Target: The Value of a Target’s Subsidiary Experience in Cross-border M&A

조혜진|정재호|임소희
한국국제경영학회 (Korean Academy of International Business)|2024.11|국제경영연구 (International Business Journal)|제35권 제4호|pp. 219-263|DOI http://dx.doi.org/10.14365/ibj.2024.35.4.8

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참고문헌

키워드

Event StudyCross-border M&A사건 연구국경 간 M&ASubsidiary TargetDual Organizational IdentityInstitutional Duality피인수 기업 특성이중 조직 정체성제도적 이중성
주제분류경영학

초록

Cross-border mergers and acquisitions (M&A) involve complex integration challenges, including dual organizational identification and managing diverse institutional environments. While previous research has focused on country-level factors, the role of target firm characteristics—especially prior subsidiary experience—has been underexplored. This study examines how different target characteristics (subsidiary vs. stand-alone, domestic vs. foreign) affect acquirer shareholder value in cross-border M&As. Using an event study of cross-border M&A deals from 1994 to 2012, we find that subsidiary experience enhances acquirer’s shareholder value. However, as institutional distance increases, the value of domestic subsidiary experience decreases. These findings highlight the importance of subsidiary experience in cross-border M&A and show how institutional distance moderates its effects, offering valuable insights for both researchers and practitioners.

Abstract

Cross-border mergers and acquisitions (M&A) involve complex integration challenges, including dual organizational identification and managing diverse institutional environments. While previous research has focused on country-level factors, the role of target firm characteristics—especially prior subsidiary experience—has been underexplored. This study examines how different target characteristics (subsidiary vs. stand-alone, domestic vs. foreign) affect acquirer shareholder value in cross-border M&As. Using an event study of cross-border M&A deals from 1994 to 2012, we find that subsidiary experience enhances acquirer’s shareholder value. However, as institutional distance increases, the value of domestic subsidiary experience decreases. These findings highlight the importance of subsidiary experience in cross-border M&A and show how institutional distance moderates its effects, offering valuable insights for both researchers and practitioners.

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