The Effects of linguistic distance and lingua franca proficiency on the stake taken by acquirers in cross-border acquisitions

We study the effects of linguistic distance and lingua franca proficiency on the equity stake taken by acquirers from 67 countries in 59,092 acquisition targets in 69 host countries. We theorize and find that acquirers take lower equity stakes in foreign targets when linguistic distance and differen...

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Main Authors: CUYPERS, Ilya, ERTUG, Gokhan, HENNART, Jean-Francois
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Language:English
Published: Institutional Knowledge at Singapore Management University 2015
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Online Access:https://ink.library.smu.edu.sg/lkcsb_research/4349
https://ink.library.smu.edu.sg/context/lkcsb_research/article/5348/viewcontent/CulyersErtug_2014_11_24_EffectsLinguisticsDistLF_afv.pdf
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Institution: Singapore Management University
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spelling sg-smu-ink.lkcsb_research-53482018-07-10T05:33:35Z The Effects of linguistic distance and lingua franca proficiency on the stake taken by acquirers in cross-border acquisitions CUYPERS, Ilya ERTUG, Gokhan HENNART, Jean-Francois We study the effects of linguistic distance and lingua franca proficiency on the equity stake taken by acquirers from 67 countries in 59,092 acquisition targets in 69 host countries. We theorize and find that acquirers take lower equity stakes in foreign targets when linguistic distance and differences in lingua franca proficiency between them are high, and take higher stakes when the combined lingua franca proficiency of the parties is high. We also find that linguistic and cultural distance reduce the impact of the combined lingua franca proficiency of the parties on the level of equity taken, which shows that the effective use of a lingua franca is affected by the native tongues and cultures of the parties. Our results clearly demonstrate that governance research and international business studies can benefit from incorporating language into their explanatory models. 2015-05-01T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/lkcsb_research/4349 info:doi/10.1057/jibs.2014.71 https://ink.library.smu.edu.sg/context/lkcsb_research/article/5348/viewcontent/CulyersErtug_2014_11_24_EffectsLinguisticsDistLF_afv.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection Lee Kong Chian School Of Business eng Institutional Knowledge at Singapore Management University linguistic distance lingua franca international acquisitions entry modes Business Strategic Management Policy
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic linguistic distance
lingua franca
international acquisitions
entry modes
Business
Strategic Management Policy
spellingShingle linguistic distance
lingua franca
international acquisitions
entry modes
Business
Strategic Management Policy
CUYPERS, Ilya
ERTUG, Gokhan
HENNART, Jean-Francois
The Effects of linguistic distance and lingua franca proficiency on the stake taken by acquirers in cross-border acquisitions
description We study the effects of linguistic distance and lingua franca proficiency on the equity stake taken by acquirers from 67 countries in 59,092 acquisition targets in 69 host countries. We theorize and find that acquirers take lower equity stakes in foreign targets when linguistic distance and differences in lingua franca proficiency between them are high, and take higher stakes when the combined lingua franca proficiency of the parties is high. We also find that linguistic and cultural distance reduce the impact of the combined lingua franca proficiency of the parties on the level of equity taken, which shows that the effective use of a lingua franca is affected by the native tongues and cultures of the parties. Our results clearly demonstrate that governance research and international business studies can benefit from incorporating language into their explanatory models.
format text
author CUYPERS, Ilya
ERTUG, Gokhan
HENNART, Jean-Francois
author_facet CUYPERS, Ilya
ERTUG, Gokhan
HENNART, Jean-Francois
author_sort CUYPERS, Ilya
title The Effects of linguistic distance and lingua franca proficiency on the stake taken by acquirers in cross-border acquisitions
title_short The Effects of linguistic distance and lingua franca proficiency on the stake taken by acquirers in cross-border acquisitions
title_full The Effects of linguistic distance and lingua franca proficiency on the stake taken by acquirers in cross-border acquisitions
title_fullStr The Effects of linguistic distance and lingua franca proficiency on the stake taken by acquirers in cross-border acquisitions
title_full_unstemmed The Effects of linguistic distance and lingua franca proficiency on the stake taken by acquirers in cross-border acquisitions
title_sort effects of linguistic distance and lingua franca proficiency on the stake taken by acquirers in cross-border acquisitions
publisher Institutional Knowledge at Singapore Management University
publishDate 2015
url https://ink.library.smu.edu.sg/lkcsb_research/4349
https://ink.library.smu.edu.sg/context/lkcsb_research/article/5348/viewcontent/CulyersErtug_2014_11_24_EffectsLinguisticsDistLF_afv.pdf
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