"TMT Faultlines, Acquisition Experience and Frequency of Cross-border Acquisitions"

Research has shown that the composition and individual member attributes of the top management team (TMT) affect acquisition frequency and success. However, the process of how team members interact to make acquisition decisions is far less studied and our understanding of team dynamics remains quite limited. Drawing upon research on transfer effects and upper echelon theory, this study investigated the relationship between the frequency of cross-border acquisitions and one of the widely studied TMT factors - acquisition experience, as well as an important factor measuring team dynamics - TMT faultlines strength. Using a sample of 521 acquisitions conducted by Chinese A-listed companies during 2003-2013, we found that TMT members’ previous acquisition experience increased the frequency of Chinese firms’ foreign acquisitions, however, such a positive relationship is weakened by the strength of faultlines among TMT members.