National Culture, Managerial Preferences, and Takeover Performance

We investigate the influence of national culture on takeover performance in a cross-disciplinary international study. Cultural differences are measured with the dimensions from the Hofstede et al. (2010) framework. Some cultural values are related to certain psychological biases that may destroy firm value in the long run. Using data on a cross-section of 53 countries and 32,856 M&A deals, we find that national culture is statistically significant in explaining different levels of takeover performance. Countries with high individualism and high uncertainty avoidance scores appear to yield lower post-acquisition stock price performance. Masculinity has a positive effect on the takeover outcome.