Country-level antecedents of target firms' post-acquisition business performance: A study of inbound Japanese and Korean M&As

In contrast to most previous studies on cross-border M&A performance, which have focused on financial outcomes for acquiring firms, we examine the post-acquisition business performance of target firms. For 109 Japanese and South Korean acquisition targets, we find negative effects of managerial distance on target firms' post-acquisition return-on-assets (ROA) development and of cultural distance on their asset growth. Furthermore, firms acquired by emerging-market multinationals recorded relatively higher ROA development and lower asset growth than other target firms. Our findings suggest that multiple performance dimensions should be considered to assess the outcomes of international M&As accurately.