ABSTRACT
This study examines potential asymmetric effects of cultural distance. We argue that valuable insights into the relationship between cultural distance and M&A performance can be gained by considering the direction of a transaction. Hence, we hypothesize that a similar cultural distance in terms of numbers can have different effects depending on the direction of the transaction and that integration positively moderates these asymmetric effects of cultural distance. Analysing 284 inbound and outbound transactions of German and Austrian companies operating in low-tech industries, we find empirical evidence for the asymmetric effects of cultural distance and post-merger integration. The results show that cultural distance has a strong negative impact on the performance of inbound, but no significant effect on outbound transactions. Similarly, the moderation effect of integration is positive and significant for outbound but insignificant for inbound transactions. These findings contain interesting implications for both managers and scholars.
