Value creation in cross-border acquisitions: The role of outside directors' human and social capital

Abstract

Do outside directors influence the performance of cross-border acquisitions? We use resource dependence arguments and a sample of 431 relatively large cross-border acquisitions undertaken by U.S. firms to explore how the human and social capital of outside directors on the acquiring firm's board influence shareholder value creation. Findings indicate that human and social capital linked to board tenure, external board appointments, and region-specific cross-border acquisition experience, but not target firm industry experience, have an impact on acquiring firms' shareholder value. Our study's theoretical and empirical contributions, along with managerial implications, are discussed.