Experience Learning And The Success Or Failure Of Chinese Companies' Cross-border Mergers And Acquisitions

In recent years,the scale and number of cross-border M&A in the world have been rising,and the transaction amount has been a record high.The issue of cross-border M&A has always been one of the focuses of academic and business circles.Among them,whether the M&A experience of enterprises is beneficial to improve the performance of cross-border M&A has always been a hot issue in the field of cross-border M&A research.Previous scholars studied this issue from the perspectives of learning curve,contingency theory,and institutional theory.They found that there is a positive correlation,negative correlation,"U-type" and irrelevant relationship between M&A experience learning and cross-border M&A performance.Although domestic research on M&A experience and cross-border M&A performance has started late,the research conclusions are also inconsistent.In the past studies on the negative impact of experience on the success rate of cross-border mergers and acquisitions,they did not clearly distinguish between the two learning errors that may occur during the empirical learning process.The research is more general,but this paper makes a clear distinction.This paper takes the M&A transactions conducted by Chinese companies in the host countries of the cross-cultural sector from 2003 to 2016 as a research sample,and from the perspective of cultural differences,analyzes in detail the first type of learning errors that are not conducive to cross-border M&A.Research findings:(1)When a company enters a host country that is not similar to the culture of the home country,in the early days of experience learning,the experience of host country mergers and acquisitions will negatively affect the success rate of M&A in the host country.In more detail,when firms conduct fewer mergers and acquisitions in a cross-cultural host country,cultural differences weaken their ability to effectively analyze causal relationships from past experiences,causing them to learn incorrectly and accumulate erroneous inferences,thus misleading the company's follow-up M&A activities in the host country.At the same time,this also provides evidence to support previous scholars that companies may misunderstand their learning experience.Therefore,experience may not always be beneficial to follow-up activities.(2)When the experience of M&A accumulated by a company in a cross-cultural host country reaches a certain level,the previous experience will have a positive impact on the success rate of subsequent mergers and acquisitions.This just confirms the point made in the previous literature-as experience accumulation,the available learning samples increase,the learning ability of the enterprise gradually improves,and finally has a positive impact on performance.(3)In addition,this paper also studies moderate effect of the average age of experience and geographical distance on the relationship between the experience of host country mergers and acquisitions and the success rate of cross-border mergers and acquisitions from the two aspects of time and space.The results show that in the early days of experience learning in dissimilar host cultures,the average age of experience will weaken the negative impact of past experience on the success rate of cross-border mergers and acquisitions,the geographical distance will aggravate the negative impact of past experience on the success rate of cross-border mergers and acquisitions.First,this means that the greater the average age of mergers and acquisitions accumulated by firms in a cross-cultural host country,the better their digestion and absorption of previous experiences,the miscalculation of causality,and the possibility of inappropriate inferences Reduced,thereby reducing the adverse effects of experience;Secondly,when the geographical distance between the home country and the target host country increases,the difficulty of daily communication increases,making the information asymmetry more serious.It will be more difficult for enterprises to obtain all the information needed to correctly infer causality from experience.It is likely that incorrectly inferring causality and making incorrect inferences ultimately exacerbates the negative impact of experience on the success rate of cross-border mergers and acquisitions.