Improving Enterprises’ Cross-Border M&A Sustainability in the Globalization Age—Research on Acquisition and Application of the Foreign Experience

• Main Authors: Zaiyang Xie, Runhui Lin, Jie Mi, Na Li
• Format: Article
• Language: English
• Published: MDPI AG 2019-06-01
• Series: Sustainability
• Subjects: cross-border M& A sustainability; foreign experience; knowledge application; value creation; executives’ characteristics
• Online Access: https://www.mdpi.com/2071-1050/11/11/3180

The advancement of globalization has encouraged an increasing number of enterprises to go abroad and take cross-border mergers and acquisitions (M&A) to expand their overseas market and improve core competitiveness, although many acquirers fail to gain value from post-acquisition integration. On the basis of organizational learning theory, this paper explores the effect of executives’ foreign experience on cross-border M&A sustainability, and examines how the externally acquired knowledge can be effectively applied to cross-border M&A practice. Taking a sample of Chinese listed companies that have completed cross-border M&As during 2008−2016, our research proposes an integrated framework of foreign experiential knowledge, and discusses the process of acquisition and application of this experiential knowledge into cross-border M&As. Empirical research findings show that, compared with the general foreign experience, the specific foreign experience based on target country significantly improves cross-border M&A sustainability, and executives with host-specific work experience plays a more important role than that of education experience. Further research found that long-tenured executives positively moderate the effect of foreign experiential knowledge on cross-border M&A sustainability, while the pay gap for executives, which hampers internal coherence, plays a negative moderating role. This research provides a new insight into the promotion of the sustainable development of enterprise cross-border M&A in the globalization age.