How do strategic and financial buyers affect post-acquisition performance

In this paper, we investigate how the type of buyer can influence cross-border acquisition performance. We combine the resource-based view with the institutional change framework to provide a more comprehensive understanding of post-acquisition performance. We hypothesise that different types of buyers can lead to divergent performances of acquired firms and that this relationship can be shaped by changes in institutional environments. Using a multi-country and multi-industry data set of 234 cross-border acquisitions, we find that both strategic and financial buyers have a positive effect on the performance of the target firm. Our findings show that strategic buyers positively affect innovative performance whereas financial buyers positively affect the economic performance of target firms. The observed effects are moderated by institutional changes.