Premium
Jumping from Springboard? The Role of Marginal Cultural Distance in Cross‐Border M&A Deal Completion
Author(s) -
Popli Manish,
Kumar Vikas
Publication year - 2015
Publication title -
thunderbird international business review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.553
H-Index - 37
eISSN - 1520-6874
pISSN - 1096-4762
DOI - 10.1002/tie.21759
Subject(s) - perspective (graphical) , margin (machine learning) , cross cultural , hofstede's cultural dimensions theory , uncertainty avoidance , economics , sociology , psychology , marketing , social psychology , business , political science , market economy , law , computer science , artificial intelligence , individualism , machine learning , collectivism
This article extends understanding of the cultural experience of a firm in a host culture as a mechanism to reduce cultural distances. Integrating organizational learning theory with cultural friction perspective, this study proposes that cultural experience of a focal firm is a unique, firm‐specific advantage. Time spent in a particular culture causes cultural friction that diminishes the cultural differences for the focal firm at the margin, which we term marginal cultural distance (MCD). Emphasizing the importance of learning from cross‐border acquisitions for firms from emerging markets, we propose that compared to country‐level cultural distance scores, MCD is a better predictor of the likelihood of cross‐border deal completion. © 2015 Wiley Periodicals, Inc.