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Synergistic Gains and National Cultural Distance

Tanveer Hussain Orcid Logo, Muhammad Shujahat Orcid Logo, Tunyi Tunyi Abongeh Orcid Logo, Mehmet Demirbag Orcid Logo

Financial Markets, Institutions & Instruments

Swansea University Author: Tunyi Tunyi Abongeh Orcid Logo

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DOI (Published version): 10.1111/fmii.70002

Abstract

Does national cultural distance create higher synergistic gains in cross-border mergers and acquisitions (CBMAs)? Existing research on the role of cultural distance suggests that cultural disparities destroy shareholders’ wealth. Using an international sample of CBMAs over 19 years, we document that...

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Published in: Financial Markets, Institutions & Instruments
ISSN: 0963-8008 1468-0416
Published: Wiley 2025
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URI: https://cronfa.swan.ac.uk/Record/cronfa70237
first_indexed 2025-08-27T15:48:08Z
last_indexed 2025-09-26T10:24:00Z
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spelling 2025-09-25T15:51:33.4972356 v2 70237 2025-08-27 Synergistic Gains and National Cultural Distance eefe2792c8eed5b49feede33981dfa53 0000-0002-5761-931X Tunyi Tunyi Abongeh Tunyi Tunyi Abongeh true false 2025-08-27 CBAE Does national cultural distance create higher synergistic gains in cross-border mergers and acquisitions (CBMAs)? Existing research on the role of cultural distance suggests that cultural disparities destroy shareholders’ wealth. Using an international sample of CBMAs over 19 years, we document that synergistic gains increase by 1.75 percentage points with one standard deviation increase in cultural distance. Drawing from the organizational learning theory, we suggest that learning diverse cultural practices in the post-acquisition stage is a source of higher synergy gains. The positive association between cultural distance and synergies is more pronounced if the acquirer pays in stock and already has takeover experience. This suggests that better awareness of the target country's culture and risk management through stock payment are boundary conditions for higher gains. Overall, our results lead to the counter-intuitive finding that CBMAs between firms from countries with dissimilar cultures are not always valued as destructive but depend on how merging firms learn the cultural practices of one another and manage integration challenges. We offer practical implications for regulators and policymakers about how the international takeover market can serve as a vehicle for learning new cultural practices and increasing combined firm value. Journal Article Financial Markets, Institutions &amp; Instruments 0 Wiley 0963-8008 1468-0416 cross-border mergers and acquisitions; national cultural distance; organizational learning theory; stock payment; synergistic gains; takeover experience; G34; D40 22 8 2025 2025-08-22 10.1111/fmii.70002 COLLEGE NANME Management School COLLEGE CODE CBAE Swansea University Another institution paid the OA fee 2025-09-25T15:51:33.4972356 2025-08-27T16:38:04.9120674 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Tanveer Hussain 0000-0003-4423-3087 1 Muhammad Shujahat 0000-0002-5552-4819 2 Tunyi Tunyi Abongeh 0000-0002-5761-931X 3 Mehmet Demirbag 0000-0002-4417-5780 4 70237__34996__066ab4f692a34557a61c7788fcb420e7.pdf Financial Market - 2025 - Hussain - Synergistic Gains and National Cultural Distance.pdf 2025-08-27T16:45:37.0031400 Output 416258 application/pdf Version of Record true © 2025 New York University Salomon Center. This is an open access article under the terms of the Creative Commons Attribution License. true eng http://creativecommons.org/licenses/by/4.0/
title Synergistic Gains and National Cultural Distance
spellingShingle Synergistic Gains and National Cultural Distance
Tunyi Tunyi Abongeh
title_short Synergistic Gains and National Cultural Distance
title_full Synergistic Gains and National Cultural Distance
title_fullStr Synergistic Gains and National Cultural Distance
title_full_unstemmed Synergistic Gains and National Cultural Distance
title_sort Synergistic Gains and National Cultural Distance
author_id_str_mv eefe2792c8eed5b49feede33981dfa53
author_id_fullname_str_mv eefe2792c8eed5b49feede33981dfa53_***_Tunyi Tunyi Abongeh
author Tunyi Tunyi Abongeh
author2 Tanveer Hussain
Muhammad Shujahat
Tunyi Tunyi Abongeh
Mehmet Demirbag
format Journal article
container_title Financial Markets, Institutions &amp; Instruments
container_volume 0
publishDate 2025
institution Swansea University
issn 0963-8008
1468-0416
doi_str_mv 10.1111/fmii.70002
publisher Wiley
college_str Faculty of Humanities and Social Sciences
hierarchytype
hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance
document_store_str 1
active_str 0
description Does national cultural distance create higher synergistic gains in cross-border mergers and acquisitions (CBMAs)? Existing research on the role of cultural distance suggests that cultural disparities destroy shareholders’ wealth. Using an international sample of CBMAs over 19 years, we document that synergistic gains increase by 1.75 percentage points with one standard deviation increase in cultural distance. Drawing from the organizational learning theory, we suggest that learning diverse cultural practices in the post-acquisition stage is a source of higher synergy gains. The positive association between cultural distance and synergies is more pronounced if the acquirer pays in stock and already has takeover experience. This suggests that better awareness of the target country's culture and risk management through stock payment are boundary conditions for higher gains. Overall, our results lead to the counter-intuitive finding that CBMAs between firms from countries with dissimilar cultures are not always valued as destructive but depend on how merging firms learn the cultural practices of one another and manage integration challenges. We offer practical implications for regulators and policymakers about how the international takeover market can serve as a vehicle for learning new cultural practices and increasing combined firm value.
published_date 2025-08-22T05:26:07Z
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