Cross-Border M&A and Strategic Noise: The Role of Psychic Distance

Abstract

The research aim of this paper is to find out the relationship between cross-border M&A and strategic noise. This paper answers the following research questions. First, is cross-border M&A noisier than domestic M&A? Second, will the psychic distance difference between the target firm and acquiring firm affect the likelihood of a noisy M&A event? To test hypotheses, this research paper conducted a multi-linear regression analysis with collected news releases based on M&A lists announced between 2001 to 2010. In this paper, the relationship between cross-border M&A and strategic noise has been proved. Also, the linkage between psychic distance and strategic noise has been proved. However, the moderating effect of psychic distance was not significant enough to be acknowledged. This paper successfully made a contribution to the expansion of impression management literature and international business literature.