Journal of International Business Studies

, Volume 40, Issue 2, pp 216–236 | Cite as

Mars–Venus marriages: Culture and cross-border M&A

  • Rajesh Chakrabarti
  • Swasti Gupta-Mukherjee
  • Narayanan Jayaraman


Using a sample of over 800 cross-border acquisitions during 1991–2004, we find that, contrary to general perception, cross-border acquisitions perform better in the long run if the acquirer and the target come from countries that are culturally more disparate. We use mainly the Hofstede measure of cultural dimensions to measure cultural distance, but also examine alternative proxies. The positive relationship of performance to cultural distance persists after controlling for several deal-specific variables and country-level fixed effects, and is robust to alternative specifications of long-term performance. Cash and friendly acquisitions tend to perform better in the long run. There is also some evidence of synergies when acquirers are from stronger economies relative to the targets.


cross-border mergers acquisitions culture 



We thank Lee Radebaugh, the Departmental Editor, and two anonymous referees for insightful comments. We thank Hyung-Suk Choi and Abhishek Sinha for excellent research assistance, and Bhagwan Chaudhry, Jonathan Clarke, Charalambos Th Constantinou, Sankar De, Cheol Eun, Vidhan Goyal, Matthew Higgins, Rocco Huang, Ravi Jagannathan, Bradley Kirkman, Kalpana Narayanan, Jay Ritter, Richard Roll, Kuldeep Shastri, Laxmikant Shukla, Ajay Subramanian and participants at the FMA 2005 European Meetings in Siena, Italy, FMA 2004 Annual Meetings in New Orleans, Georgia Tech International Finance Conference and the Indian School of Business, Hyderabad Finance Workshop as well as seminar participants at Georgia Tech, Indian Institute of Management-Calcutta and Indian Statistical Institute-New Delhi for their helpful comments. We are responsible for all remaining errors. Gupta-Mukherjee acknowledges financial support from the Alan and Mildred Peterson Foundation for National Science Foundation (NSF) IGERT Graduate Associates. Jayaraman acknowledges research support from CIBER at Georgia Institute of Technology.


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Copyright information

© Academy of International Business 2008

Authors and Affiliations

  • Rajesh Chakrabarti
    • 1
  • Swasti Gupta-Mukherjee
    • 2
  • Narayanan Jayaraman
    • 3
  1. 1.Indian School of BusinessHyderabadIndia
  2. 2.School of Business Administration, Loyola University ChicagoChicagoUSA
  3. 3.College of Management, Georgia Institute of TechnologyAtlantaUSA

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