The Influence Of Cultural Differences On Post-merger Integration Effect

Propelled by government policies like "Go global","Industrial upgrading" and"The Belt and Road Initiatives" as well as the developing of overall strength,Chinese enterprises led a new wave of cross-border mergers and acquisitions(M&As)around the world.From the statistics we know that the target of M&As are roughly within developed countries and areas like Europe,North America and Oceania,whose culture are usually quite different from Chinese culture.These cross-border M&As could be regarded as communications between Chinese and western culture.The key point of post-merger integration synergy(PMI-synergy)is the PMI itself,which makes significant sense to study and discuss about how the difference of cultxires among different countries affects the PMI process.The article is based on Hofstede Cultural Dimension Theory as well as PMI-synergy theory and focused on the fact of cross-border M&As of Chinese enterprises,trying to figure out the relationship between culture difference and PMI-synergy.Besides,we are going to study the role of integrating capability in the process that culture difference affects PMI-synergy,where the role includes both the moderating direction and itfs strength and integrating capability contains experience and extent of cross-border M&As.To study the topics listed above,we use literature research method to reorganize the relevant current research and outcomes,then come up with our hypothesis and model for evaluation of PMI-synergy.Then we use descriptive statistic on cases of cross-border M&As made by Chinese enterprises during 2007-2014 from the perspectives of both time and area.Finally we use hypothesis test to verify our hypothesis.To be specific,we use PMI-synergy index as dependent variable,the difference among cultures as independent variable and the experience and extent of cross-border M&As as moderating variables.This is used to verify the effects that culture difference made on PMI-synergy,and also the moderating effect that integrating capacity made during the process.The results shows that by setting the control variables like age,scale,cash flow,payment method and market-to-book ratio of an enterprise,the culture difference and PMI-synergy is in a negative correlation.That is,the more difference between cultures of each side of the M&A,the less the PMI-synergy would be.The experience and extent of cross-border M&As makes negative moderating effects on PMI-synergy,which means that the experience and extent of cross-border M&As could undermine the negative effect imposed by culture difference.This conclusion of this article gives us two inspirations.The first is,while doing cross-boarder M&As,enterprises should evaluate the adaptation between cultures of the two sides,and pay attention to the effect that culture difference made on PMI-synergy in order to have the reasonable integration strategy.Secondly,while doing cross-boarder M&As,enterprises should value the accumulation of PMI experiences,train new talents with international views and so enhance the PMI capacity.