Edinburgh Napier University

  This paper examines the effects of culture and the interaction between cultural distance and salient acquirer characteristics on value creation of acquiring firms based on a sample of 397 firms over the period of 1998-2012. The findings indicate that Chinese acquirers experience wealth gains ranging from 0.4458% –1.4869% over a 10-day event window. We also find cultural distance to exert a negative and significant influence on value creation of acquirers. Further evidence shows that large acquirer size, prior experience and high Tobin’s q positively moderate the link between cultural distance and value creation. The findings suggest that the effect of culture distance is conditioned by the acquirer size, prior experience and Tobin’s q implying that acquirer resources and managerial capabilities are important in dealing with and overcoming CBM&A cultural challenges