Current Search: Export Marketing--Management (x)
-
-
Title
-
Institutional Distance, Social Capital, and the Performance of Foreign Acquisitions in the United States.
-
Creator
-
Rottig, Daniel, Reus, Taco H., Florida Atlantic University
-
Abstract/Description
-
This dissertation examined the roles of institutional distance and corporate social capital in the unique context of foreign acquisitions in the United States. A conceptual framework was developed which suggests that institutional distance has a dual impact on international acquisition performance. Institutional distance makes it more difficult for foreign acquirers to establish legitimacy in the United States, and therefore adversely affects acquisition success. Institutional distance also...
Show moreThis dissertation examined the roles of institutional distance and corporate social capital in the unique context of foreign acquisitions in the United States. A conceptual framework was developed which suggests that institutional distance has a dual impact on international acquisition performance. Institutional distance makes it more difficult for foreign acquirers to establish legitimacy in the United States, and therefore adversely affects acquisition success. Institutional distance also has a beneficial effect on acquisition performance to the extent to which it provides valuable opportunities for institutional arbitrage. Corporate social capital was discussed as a strategy to aid foreign MNCs in overcoming the detrimental, and leveraging the beneficial effects of institutional distance on these cross-border transactions. Analysis results based on a sample of 247 large-scale acquisitions in the US by publicly traded foreign acquirers that were made between 2000 and 2005 provided overall support for the hypothesized model. It was found that each of the three dimensions of institutional distance - regulatory, normative, and cultural distance- was negatively associated with the local media endorsement of foreign acquirers. Furthermore, regulatory distance was negatively associated with the investment ratings of foreign acquirers, and normative distance had a positive impact on the number of local lawsuits filed against these firms. Results from this study also showed that the existence of corporate social capital aided foreign acquirers in overcoming the negative effect of regulatory distance on both the firms' investment ratings and their local media endorsement. The findings further revealed that media endorsement of foreign acquirers in the United States was positively related to acquisition performance as indicated by cumulative abnormal returns. Moreover, legitimate foreign acquirers with high investment ratings were able to leverage cultural distance, given that the relationship between investment ratings and acquisition performance was positive for this group of acquirers. The results reported in this study therefore emphasize the importance of organizational legitimacy and corporate social capital for international acquisition performance, and shed light on the detrimental and beneficial roles of institutional distance in this context. In so doing, this dissertation strengthens institutional theory and social capital theory as powerful perspectives in international strategic management.
Show less
-
Date Issued
-
2008
-
PURL
-
http://purl.flvc.org/fau/fd/FA00000611
-
Subject Headings
-
International Economic Relations, Foreign Trade Regulation, Export Marketing--Management, International Business Enterprises--Management
-
Format
-
Document (PDF)
