Impact of Cross-border M&A Experience on the Efficiency of Subsequent Deals

Experience in M&A has been traditionally considered as the source of knowledge that can result in higher efficiency of the subsequent deals. The growing popularity of cross-border M&A deals, which are complicated by cross-country differences, increases the importance of studying the learning-by-doing effect for cross-border transactions. This study is aimed to identify the characteristics of past M&A deals which make the experience relevant to the subsequent deals, increasing their performance. Examining a sample of 401 cross-border mergers and acquisitions initiated by the non-financial U.S. companies over 2009-2015, we find the positive relationship between the level of acquirer’s industry-specific M&A experience and the efficiency of the current deal. In addition, we reveal that the effect of industry-specific experience on the deal efficiency can be contingent on the degree of cultural and institutional differences between the acquiring and acquired firm countries.