Exploring the impact of interstate conflicts on cross-border acquisition outcomes

• Applicant: Professor Dr. Rüdiger Kabst, since 7/2018
• Subject Area: Accounting and Finance
• Term: from 2018 to 2020
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 391979753

Cross-border acquisitions (CBAs) are an important means for multinational enterprises (MNEs) to expand abroad and have swiftly grown in numbers worldwide over the past decades. While CBAs can offer MNEs many advantages and opportunities, such as quick entry into foreign markets or access to valuable resources, they also frequently end in failure. Sometimes, acquisitions do not come to fruition after having tied up valuable resources such as management attention and consultant/ attorney fees. At other times, CBAs are completed, but fail to produce the intended performance outcomes. While prior work has generated valuable insights on the drivers of CBA outcomes, potential contributions from political science and international relations have been largely neglected in the study of CBA completion and/ or performance.In this proposal, we seek to investigate the role of international relations and politics in CBA outcomes. In particular, we intend to use quantitative empirical methods to explore the impact of interstate conflicts on CBA completion and performance. In so doing, our work seeks to contribute to the study of potential drivers of M&A completion and performance. We also intend to expand prior work on the role of political environment in international strategy research that has primarily used the unilateral constructs, such as political risks. Moreover, we hope that our work helps expand theoretical frameworks that explicitly account for unilateral political factors instead of bilateral international relations. In addition to the theoretical objectives, our study can offer objective findings to managers and policy-makers on an important and timely topic, i.e. interstate conflicts.

• DFG Programme: Research Grants
• International Connection: USA
• Cooperation Partners: Professor Ilgaz Arikan, Ph.D.; Professor Oded Shenkar, Ph.D.
• Ehemaliger Antragsteller: Professor Dr. Chengguang Li, until 6/2018