The Influence Of Institional Distance On The Long-term Performance Of Cross-border M＆As

With the globalization of the economy,the strengthening of China’s economic strength and the implementation of China’s“the Belt and Road Initiative”strategy,more and more Chinese companies have begun to adopt a global strategic layout,in which cross-border M&As is the main way for Chinese enterprises to invest abroad.The traditional liability of foreignness and organizational legitimacy theory believes that the institutional distance causes the liability of foreignness and the legitimacy of organizations to influence the performance of cross-border M&A especially the short-term performance.This paper argues that the traditional theoretical analysis is not suitable for the long-term performance of Chinese companies’cross-border M&ATherefore,this paper has done the following expansion research:First,this paper studies the relationship between institutional distance and long-term performance of cross-border M&As,and measures the performance of cross-border M&As with financial indicators.Second,based on the conditions of China’s developing countries,the paper analyzes the relationship between institutional distance and long-term performance of cross-border M&As from the perspective of Chinese enterprises seeking strategic resources and enterprise innovation overseas.The third is to introduce the factors of the state-ownership and the experience of cross-border M&As,which may affect the M&As performance,as the adjustment variables,to study the adjustment effect.In order to test the theoretical analysis hypothesis of this paper,based on the previous research,this paper selects 203 effective cross-border M&As samples from 2008 to 2015,and uses the financial indicator as a measure of the long-term performance of the company’s cross-border M&As.The indicator measures the institutional distance between the home country and the host country from the two dimensions of formal institutional distance and informal institutional distance.This paper adopts multiple linear regression model to test hypothesis.The regression results show that formal and informal institutional distance both have a positive impact on the long-term performance of cross-border M&As.In addition,research shows that the state-ownership and cross-border M&As experience both have a negative regulatory effect on formal institutional distance and have no regulatory effect on informal distance.Finally,based on the results of comprehensive theory and empirical research,the paper provides some suggestions for cross-border M&As strategies.