How do reputation and international experience influence the choice of cross-border acquisitions?
Résumé
We combine internationalization theories and the emerging literature on reputation to examine the acquisition decision of a longitudinal sample of European and US firms. We argue that both reputation and knowledge acquired through experience of cross-border acquisitions influence the decision to make new international acquisitions. Our results indicate an inverted U-shaped relationship between firm reputation and the likelihood of making cross-border acquisitions. We also find that international experiential knowledge is positively related to the likelihood of subsequent cross-border acquisitions, and that such experience moderates the relationship between reputation and the likelihood of additional cross-border acquisitions.
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