Economic Distance and Colonial Tie: South African Firms’ Cross-border M&As

South African firms increasingly acquire targets in developed economies. While economic distance signifies the opportunity to attain the valuable strategic assets, the difference in economic status may negatively impact these South African acquirers’ post-acquisition performance. In the current study, we study country and organizational characteristics to investigate these emergent acquirers’ post-acquisition performance. Using the data on South African acquisitions in developed economies between 1994 and 2012, we find significant moderation effects of colonial tie and firm age. While more established firms can better capitalize the synergy benefits afforded in the economic distance, the historical connection based on the colonization history between the host and home market does not improve acquirer’s post-acquisition performance. Additionally, younger firms tend to be able to utilize the colonial tie to their advantage and enjoy better performance. Overall, this work contributes to discussion on how hos...