Skip to main content

LUP Student Papers

LUND UNIVERSITY LIBRARIES

Cultural Distance’s Effect on Short-Term Acquisition Performance - Evidence from Swedish Acquirers

Rezai, Alia LU ; Lindau, Ludwig LU and Thorstenson, Vilhelm LU (2023) IBUH19 20231
Department of Business Administration
Abstract (Swedish)
This quantitative study aims to investigate whether cultural distance has any significant effect on short-term acquisition performance, measured as abnormal returns for Swedish cross-border acquisitions. This study adds to previous literature through filling the gap where there has been a lack of a sample of Swedish acquirers, using a multi-measurement approach, and having a broad sample of acquisitions conducted in Europe between the years 2000-2022. Short-term performance is measured through cumulative average abnormal returns (CAAR) within a [-2, 2] event window while cultural distance is measured through the Euclidean index, built on Hoftstede’s cultural dimensions. Further, we aim to investigate whether individual dimensions of... (More)
This quantitative study aims to investigate whether cultural distance has any significant effect on short-term acquisition performance, measured as abnormal returns for Swedish cross-border acquisitions. This study adds to previous literature through filling the gap where there has been a lack of a sample of Swedish acquirers, using a multi-measurement approach, and having a broad sample of acquisitions conducted in Europe between the years 2000-2022. Short-term performance is measured through cumulative average abnormal returns (CAAR) within a [-2, 2] event window while cultural distance is measured through the Euclidean index, built on Hoftstede’s cultural dimensions. Further, we aim to investigate whether individual dimensions of Hofstede’s cultural distance index has more importance for generating abnormal returns during acquisitions than others. By analysing cultural distance, masculinity and uncertainty avoidance, using a multivariate regression model, the study does not find any significant effect upon cumulative average abnormal returns, or short-term acquisition performance. None of the independent variables has any significant statistical effect upon CAAR. The results therefore questions the significance of cultural distance for short-term acquisitions performance in Europe but opens up for new research using alterations of measurements used for this study. (Less)
Please use this url to cite or link to this publication:
author
Rezai, Alia LU ; Lindau, Ludwig LU and Thorstenson, Vilhelm LU
supervisor
organization
course
IBUH19 20231
year
type
M2 - Bachelor Degree
subject
keywords
Cultural distance, Masculinity, Uncertainty Avoidance, Short-term acquisition performance, Cumulative average abnormal returns, Cross-border acquisitions
language
English
id
9120852
date added to LUP
2023-09-12 13:27:11
date last changed
2023-09-12 13:27:11
@misc{9120852,
  abstract     = {{This quantitative study aims to investigate whether cultural distance has any significant effect on short-term acquisition performance, measured as abnormal returns for Swedish cross-border acquisitions. This study adds to previous literature through filling the gap where there has been a lack of a sample of Swedish acquirers, using a multi-measurement approach, and having a broad sample of acquisitions conducted in Europe between the years 2000-2022. Short-term performance is measured through cumulative average abnormal returns (CAAR) within a [-2, 2] event window while cultural distance is measured through the Euclidean index, built on Hoftstede’s cultural dimensions. Further, we aim to investigate whether individual dimensions of Hofstede’s cultural distance index has more importance for generating abnormal returns during acquisitions than others. By analysing cultural distance, masculinity and uncertainty avoidance, using a multivariate regression model, the study does not find any significant effect upon cumulative average abnormal returns, or short-term acquisition performance. None of the independent variables has any significant statistical effect upon CAAR. The results therefore questions the significance of cultural distance for short-term acquisitions performance in Europe but opens up for new research using alterations of measurements used for this study.}},
  author       = {{Rezai, Alia and Lindau, Ludwig and Thorstenson, Vilhelm}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Cultural Distance’s Effect on Short-Term Acquisition Performance - Evidence from Swedish Acquirers}},
  year         = {{2023}},
}