1 research outputs found
Cultural distance and the permanence of acquired CEOs in crossâborder highâtech acquisitions: combining the acquirer's and CEO's perspectives
The cultural distance between the acquiring and acquired firms is a double-edged sword in
cross-border high-tech acquisitions. It magnifies the âcombination potentialâ of the acquisition
but also poses severe integration challenges. Scholars have highlighted that the retention
of acquired CEOs in combined entities is an effective integration action to address
these challenges but have generally considered it from the acquiring firmsâ perspective only.
In this study, we also take into account the acquired CEOsâ perspective and find that the
permanence of acquired CEOs in the post-acquisition organization depends on the balance
between the acquiring firmsâ incentives to retain the acquired CEOs and the acquired
CEOsâ opportunity costs to remain in the company. Specifically, we argue that both sides
increase with the cultural distance between the acquiring and acquired firms and that the
acquired CEOsâ personal characteristics and context-specific conditions also influence this
balance. We test our hypotheses using a sample of 447 cross-border acquisitions of small
high-tech firms by large listed firms between 2001 and 2014. Our findings confirm our
expectations and highlight the role of micro-foundational characteristics in shaping the
effect of key macro-level factors on the integration of high-tech acquisitions in international
contexts