The Influence Of Language Distance On The Efficiency Of Overseas M&A Of Chinese Enterprises

In recent years,due to the trend of "anti globalization" and the rise of trade protectionism,Chinese enterprises face more difficulties and challenges in realizing high-quality overseas investment.Since the "going out" strategy was put forward in2001,the foreign direct investment of Chinese enterprises has increased greatly,and has long become a leading force in the global market.According to the business development plan,the state will further support Chinese enterprises to participate in the global industrial chain and promote Chinese enterprises to "go global".Overseas M & A can bring strategic assets to enterprises and improve innovation ability and international competitiveness.It is one of the main ways for Chinese enterprises to invest abroad.The efficient completion of overseas M & A is very important for Chinese enterprises to achieve high-quality overseas development.However,Chinese enterprises’ overseas M& A involves a wide range of regions and rich languages,which may hinder Chinese enterprises from "going global".And the existing research focuses more on the success or failure of M & A and the integration performance after M & A,and pays less attention to the efficiency of M & A.from the perspective of language,exploring its impact on the efficiency of overseas M & A of Chinese enterprises deserves more attention from scholars.Based on the above realistic background,this paper uses a combination of theoretical and empirical methods to study the impact of language distance on the efficiency of Chinese enterprises’ overseas M & A,and explores how language factors affect the efficiency of Chinese enterprises’ overseas M & A from the two dimensions of transaction cost and identity.This study uses the WALS index to quantify the language distance between China and other countries,and collects and sorts out the relevant data of overseas M & A of Chinese enterprises Thomson M & A database.At the same time,this paper also introduces two variables,Confucius Institute and Common Language,in order to explore the impact of language factors on the efficiency of overseas M & A of Chinese enterprises more comprehensively.In addition,this paper also introduces some variables of situational distance and cultural distance to regulate these two variables.Through empirical research,the main findings are as follows:(1)There is an "inverted U-shaped" relationship between language distance and overseas M & A efficiency of Chinese enterprises;(2)The improvement of English level and the establishment of Confucius institutes can have a positive impact on the efficiency of overseas M & A of Chinese enterprises;(3)Geographical distance increases the negative impact of language distance on M & A efficiency.In view of the above research results,this paper puts forward the following suggestions from the enterprise and national levels: from the enterprise level,when enterprises conduct overseas M & A,they can consider more language distance factors to improve the rationality of M & A decision.In addition,enterprises can implement a series of measures to reduce the language barriers that may be encountered in the process of M & A.Finally,enterprises can cultivate their employees’ relevant awareness and improve their common language level.At the national level,the state also needs to pay more attention to the application of language in cross-cultural management,encourage more language related policy research,strengthen support for the construction of overseas Confucius Institutes or classrooms,and improve the popularity and mastery of common language in China.