Abstract:
This paper looked at the past performance of multinational companies from emerging
market countries post their merger and acquisition deals of subsidiaries based in
developed markets. It investigated the link and influence of cultural distance and
international experience on the post-acquisition operational performance of emerging
market multinational firms. Two hypotheses were developed i.e., that the is a negative
link of cultural distance to performance and secondly there is a positive correlation of
international experience to performance after the acquisition. In a review of 116 merger
and acquisition deals from South Africa to developed countries between 1994 and 2018,
the investigation found that these multinational firms on average experienced a
deterioration in performance after the foreign direct investment deal. The investigation
did not find enough statistical evidence in support of the two hypotheses; thus both were
rejected.
