Dissertation/Thesis Abstract

A study of cross -border takeovers: Examining the impact of national culture on internalization benefits, and the implications of early versus late -mover status for bidders and their rivals
by Steigner, Tanja, Ph.D., University of South Florida, 2008, 102; 3326038
Abstract (Summary)

This dissertation consists of two self-contained chapters that empirically examine bidder firm returns of U.S. companies in cross-border mergers and acquisitions.

In chapter one I examine how cultural distance between bidder and target country impacts internalization benefits. The results suggest that shareholders are initially concerned about the acquisition in culturally distant countries, which outweighs any potential benefits from internalization. However, in the long-run we observe a significant reversal of these findings. In the second and third year following the announcement, greater cultural distance positively impacts the bidder firm’s operating performance and the bidder experiences significant internalization benefits from technological know-how when cultural distance is great. Long-run calendar-time returns further support this finding. These results add to the existing literature by highlighting the importance of cultural distance when examining internalization benefits.

In chapter two I attempt to explain abnormal bidder firms’ returns in cross-border mergers and acquisitions by comparing the first-mover hypothesis to the late-mover hypothesis. I also study the reactions of rival firms to bidder firm announcements as a further test of the first-mover hypothesis. The findings suggest that cross-border acquisitions are generally value-destroying for strategic pioneers unless cultural distance between the U.S. and the target country is great. Further, I find positive announcement effects for followers as long as cultural distance is small.

Indexing (document details)
Advisor: Sutton, Ninon
School: University of South Florida
School Location: United States -- Florida
Source: DAI-A 69/08, Dissertation Abstracts International
Subjects: Management, Finance
Keywords: Announcement effects, Bidder gains, Hofstede's cultural dimensions, Hofstede, Geert, Intangible assets, Long-run returns, Mergers and acquisitions, National culture
Publication Number: 3326038
ISBN: 9780549774075
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