Host Country Cultural Characteristics And The Success Or Failure Of China's Cross-border Mergers And Acquisitions

In recent years,the completion rate of China's cross-border mergers and acquisitions has decreased year by year due to factors such as China's policy supervision,Sino-US trade frictions,investment restrictions in western developed countries,and currency devaluation.Under the current "anti-globalization" trend of thought and trade protectionism,improving the success rate of cross-border mergers and acquisitions is an important topic for scholars.Based on the Institutional Theory and the Liability of Foreignness Theory,this article explores the reasons for the success or failure of China's cross-border mergers and acquisitions from the relatively stable cultural characteristics of the host country.It has enriched the related research in the field of cross-border mergers and acquisitions to a certain extent,and has analyzed the current economic policies of enterprises.and provide relevant recommendations for corporations who want to implement cross-border mergers and acquisitions in today's unstable economic policyThis article takes China's 2722 cross-border mergers and acquisitions as the research object from 1997 to 2017,and explores the impact of host country cultural characteristics on cross-border mergers and acquisitions in China from the perspective of host country cultural tolerance and social trust level.and explores whether it is affected by the level of legal system in the formal system of the host country.In a further test,this article expands the connotation of cross-border M & A success,examines the relationship between M & A transaction efficiency and post-M & A performance and the cultural characteristics of the host country,and more comprehensively analyzes the cultural factors in the process of cross-border M & A impact and role.The main conclusions of this article are as follows:(1)The higher the cultural tolerance of the host country,the easier it is for China to succeed in cross-border mergers and acquisitions;(2)The higher the level of social trust in the host country,the easier it is for China to succeed in cross-border mergers and acquisitions;(3)The culture characteristics of the host country on the success or failure of cross-border mergers and acquisitions is affected by the level of legal system in the formal system of the host country,and it has been verified that there is a certain substitution between tolerance and trust as an informal system and the level of rule of law as a formal system;(4)The cultural tolerance of the host country not only affects the completion rate of cross-border mergers and acquisitions,but also has a positive impact on the M & A transaction efficiency and post-merger performance;Social trust in the host country has only a positive impact on the completion rate and performance of cross-border mergers and acquisitions,and has no effect on the M & A transaction efficiency.Based on the above theoretical analysis and research results,this paper proposes the following policy recommendations:(1)Pay attention to the impact of outsiders' disadvantages.When companies choose cross-border M & A targets,they can pay more attention to and compare the cultural environment and legal environment of the host country to improve their decision-making.(2)Fully recognize the complexity of crossborder mergers and acquisitions,make full use of the two cultural elements of cultural tolerance and social trust at different stages of cross-border mergers and acquisitions,and take certain measures to enhance the role of these two cultural elements(3)Government departments need to attach importance to the role of cultural exchanges,increase trust and dispel doubts,eliminate the inherent bias of nationals of other countries to China,and promote exchanges and cooperation in economic and trade between the two sides.