Cross-border Acquisition Completion in the Chinese Context: An Organizational Learning Perspective

Abstract

We investigate the transfer theory of learning on the organizational level in the contexts of Chinese cross-border and domestic acquisitions. Our results from the pre-acquisition phase suggest that prior domestic experience gained in mainland China has had a negative influence on the completion likelihood of a focal cross-border acquisition attempt. In accordance with findings of prior studies, target-to-target industry similarity benefits the transfer of learning achieved from both Chinese domestic and foreign experiences. However, culture distance seems to have inconsistent influences on the learning effects of these two types of acquisition experiences. On the one hand, culture distance is found to exacerbate the negative transfer of domestic learning, but on the other hand, it helps Chinese outward acquirers take advantage of their previous foreign acquisition experiences.