Meta-Analyses of the Performance Implications of Cultural Differences in Mergers and Acquisitions: Integrating Strategic, Financial, and Organizational Perspectives

In an attempt to explain the lack of consensus that emerged from a review of the extant literature on the performance implications of cultural differences in mergers and acquisitions [M&A], meta-analyses were conducted for three categories of performance measures: stock market-based measures, accounting-based measures, and socio-cultural integration outcomes. As hypothesized, meta-analytic findings indicate that cultural differences are associated with negative outcomes at the socio-cultural level, after correcting effect sizes for unreliability and bias, removing outliers, and controlling for firm relatedness and relative firm size. However, cultural differences were found to be unrelated to accounting-based measures of postacquisition performance and positively related to abnormal returns for the shareholders of acquiring firms. We conclude that whether cultural differences have a positive or negative impact on M&A performance depends on the outcome variable under investigation, the nature and extent of cultural differences, the integration approach taken, and the interventions chosen to manage these differences.