International Experience, Cultural Differences And Cross-border Acquisitions Performance Of Chinese Companies

The research of the influence of international experience and cultural differences on performance of cross-border mergers and acquisitions of Chinese enterprises has important theoretical and practical significance. This paper, based on Organizational Study theory and Hofstede Cultural Dimension Theory, with deduction from the applicability of the experience, aims at researching relationship of international I experience, cultural differences and performance of cross-border mergers and acquisitions of Chinese enterprises, and regulation brought by cultural differences to the progress of international experience affecting performance of cross-border mergers and acquisitions of Chinese enterprises, including the direction and intensity of regulation.In order to research the question above, firstly, from the review of current research, a conception model and a calculation model, as well as a hypothesis are structured, secondly, an empirical analysis with survey data about this research is carried out to verify the effectiveness of proposed calculation model. In this paper, empirical analysis and event study analysis are adopted. In the proposed calculation model, cross-border mergers and acquisitions of Chinese enterprises cases during 2007 to 2014 are selected as samples, international experience as independent variable and cultural distance as the regulation variable. CAR of the samples are adopted as the measurement of performance of cross-border mergers and acquisitions of Chinese enterprises, culture distance of countries, calculated by Hofstede Culture Theory, are chosen to measure culture distance.The result of empirical analysis of proposed model, which contains Global Competiveness Index of host country, the age of enterprise, the scale of enterprise, industrial correlation coefficient of acquirer and target, the scale of deals and acquired stock as control variables, show us three results:firstly, the negative correlation between international experience and performance of cross-border mergers and acquisitions of Chinese enterprises. That is to say, as international experience grows, the performance of cross-border mergers and acquisitions of this enterprise can not be advanced positively. Secondly, the result also indicates the negative correlation between cultural distance and performance of cross-border mergers and acquisitions of Chinese enterprises, which means that the larger the cultural distance is, the worse the performance of cross-border mergers and acquisitions of this enterprise is. Thirdly, the result display the positive regulation brought by cultural differences to the progress of international experience affecting performance of cross-border mergers and acquisitions of Chinese enterprises.The practical significance of this paper can be relected on tow respects. On one side, that one company’s international experience is not able to make difference independently, one should not ignore effects produced by applicability of the international experience under totally new circumstances on performance of cross-border mergers and acquisitions of this enterprise because of existing experience they already have, especially the oeffects posed by luture distance of countries. On the other side, it is ability of mergers and acquisitions that is helpful for success of cross-border mergers and acquisitions of companies.