The Role of Confucius Institutes and One Belt, One Road Initiatives on the Values of Cross-Border M&A: Empirical Evidence from China

This study examines how national cultural policies such as Confucius Institutes and One Belt, One Road initiatives (BRI) affect the post-acquisition returns of Chinese cross-border mergers and acquisitions based on data from a sample of 192 transactions covering 2011 to 2015. We find that the cultur...

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Bibliographic Details
Published in:Sustainability 2020-12, Vol.12 (24), p.10277
Main Authors: Jung, Jin-Young, Wang, Wei, Cho, Sung-Woo
Format: Article
Language:English
Subjects:
Acquisitions & mergers
Confucius (551-479 BC)
Cooperation
Cultural differences
Culture
Data acquisition
Economic crisis
Economic development
Economic growth
Foreign investment
GDP
Gross Domestic Product
Heterogeneity
Sustainable development
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Summary:This study examines how national cultural policies such as Confucius Institutes and One Belt, One Road initiatives (BRI) affect the post-acquisition returns of Chinese cross-border mergers and acquisitions based on data from a sample of 192 transactions covering 2011 to 2015. We find that the cultural export of Chinese Confucius Institutes and the BRI exert a significantly positive impact on long-term acquirer returns, while cultural/institutional distance exerts a negative impact. Further evidence shows that Confucius Institutes and BRI mitigate the negative effect of cultural distance between merging firms. These results offer the first evidence that national cultural translation has substantial impacts on the long-run acquirer financial performance of cross-border mergers that decrease cultural institutional heterogeneity between countries.
ISSN:2071-1050
2071-1050
DOI:10.3390/su122410277