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Although many cross-border acquisitions (CBAs) by emerging-market multinationals (EMMs) are aimed at improving domestic operating performance, the conditions under which such CBAs are the most effective have been underexplored. Drawing on global strategy research on resource recombination and organizational learning, we propose that the effectiveness of domestic-improvement oriented CBAs crucially depends on EMMs' cross-cultural experience, as EMMs apply different forms of resource recombination to such CBAs as a function of that experience, with varying degrees of success. Specifically, we hypothesize a U-shaped relationship between an EMM's cross-cultural experience and the domestic productivity growth it realizes from a domestic-improvement oriented CBA, and that this relationship is steeper for acquisitions involving more intensive integration or relatively larger targets but flatter for acquirers from countries with larger institutional voids. Measuring both the depth and breadth of firms' cross-cultural experience, we obtain support for our hypotheses in a sample of 423 domestic-improvement oriented CBAs by manufacturing firms from 13 emerging economies, thereby shedding light on what determines the effectiveness of such CBAs. ispartof: Long Range Planning status: Published online |
