Post-Acquisition Operating Performance of Acquiring Firms following Cross-Border Mergers and Acquisitions

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

There are some major and minor points that should be adjusted and improved before processing further.

Major

The abstract is not complete and informative.

Data description is not given. A table including information about data with appropriate explanations should be included. Source of data should be given in the reference list.

A discussion section explaining the academic importance of the paper (not only similarity with previous research, but also the difference from the previous research), contribution, and policy implications, should be included.

Minor

The paper has many grammatical and style mistakes. For example use of period instead of colon in the title, use of & instead of “and”, repeated period in some subtitles, capital names for some authors in references, different styles for reference in the text etc. The text should be proofread.

Comments on the Quality of English Language

The paper has many grammatical and style mistakes. For example use of period instead of colon in the title, use of & instead of “and”, repeated period in some subtitles, capital names for some authors in references, different styles for reference in the text etc. The text should be proofread.

Author Response

Reviewer 1: Comments and Responses

There are some major and minor points that should be adjusted and improved before processing further.

Major

Comment: The abstract is not complete and informative.

Response: The abstract is revised.

Comment: Data description is not given. A table including information about data with appropriate explanations should be included. Source of data should be given in the reference list.

Response: A data description table is now added in the appendix with explanations.

Comment: A discussion section explaining the academic importance of the paper (not only similarity with previous research, but also the difference from the previous research), contribution, and policy implications, should be included.

Response: This section is also revised as suggested. 

Minor

Comment: The paper has many grammatical and style mistakes. For example use of period instead of colon in the title, use of & instead of “and”, repeated period in some subtitles, capital names for some authors in references, different styles for reference in the text etc. The text should be proofread.

Response: A proofread is done and all such errors are removed.

Reviewer 2 Report

Comments and Suggestions for Authors

Thank you for giving me the opportunity to read the article economies-3012068 « Post-acquisition operating performance of acquiring firms following cross-border mergers and acquisitions. An empirical study based on French firms».

The authors conducted a study on the impact of cross-border mergers and acquisitions based on the theory of organizational learning and an institutional approach. The complexity of the research problem is compounded by the different cultural and institutional contexts in mergers of companies from different countries.

The strength of the  research - the study aims to examine firms' performances following cross-border mergers and acquisitions over the period 2006-2022 using the generalized method of moments (GMM) technique.

My comments are as follows:

The abstract is weak and needs to be expanded. The authors should add relevance to the abstract and reveal the novelty and originality of the research findings.

It is also necessary to align the purpose of the study with the literature review in the paper. 

The authors study the impact of acquisition experience, industry connections, and mention only institutional quality and cultural similarities. They contribute to the discussion by examining how these factors affect the performance of acquiring firms after acquisition, but in the abstract and introduction, they only mention the conclusions from research on cultural differences and institutional quality.

The authors note that cultural similarities can be a deterrent. Typically, the works highlight cultural similarities and institutional environment similarities as a positive aspect, while cultural differences and variations in the institutional setting in local countries hinder the growth of a multinational corporation. 

Add the purpose of the research in the introduction.  Remove the findings  from introduction and add in Conclusion section. 

Include recent publications on the topic of research in the literature review, justification of hypotheses between 2020 and 2023. There have been a significant number of such publications. Some examples include:

Liu, Y., Vrontis, D., Visser, M., Stokes, P., Smith, S., Moore, N., ... & Ashta, A. (2021). Talent management and the HR function in cross-cultural mergers and acquisitions: The role and impact of bi-cultural identity. Human Resource Management Review, 31(3), 100744.

Khan, Z., Rao-Nicholson, R., Akhtar, P., & He, S. (2021). Cross-border mergers and acquisitions of emerging economies' multinational enterprises—The mediating role of socialization integration mechanisms for successful integration. Human Resource Management Review, 31(3), 100578.

Caiazza, S., Galloppo, G., & Paimanova, V. (2021). The role of sustainability performance after merger and acquisition deals in short and long-term. Journal of Cleaner Production, 314, 127982.

Bhasin, N., & Garg, S. (2020). Impact of institutional environment on inward FDI: A case of select emerging market economies. Global Business Review, 21(5), 1279-1301.

Xu, K., Hitt, M. A., Brock, D., Pisano, V., & Huang, L. S. (2021). Country institutional environments and international strategy: A review and analysis of the research. Journal of International Management, 27(1), 100811.

The authors emphasize that they are studying their question using the example of French companies.

In conclusion, they show whether there are differences between French companies and companies from other countries based on earlier studies on similar issues. 

Hypothesis 1 is formulated on the basis of an obvious fact.  

Add a definition of what the authors mean by "institutional quality" and "criteria for a qualitative institutional environment". 

Add the designations of the components of Models (2) and (3). 

Add abbreviated names of variables in parentheses in Table 3. 

The conclusion is weak, and it is necessary to strengthen it and emphasize its importance for theory, economics, and management.

Highlight the theoretical, economic, and managerial implications of your findings.

Author Response

Reviewer 2: Comments and Suggestions for Authors

My comments are as follows:

The abstract is weak and needs to be expanded. The authors should add relevance to the abstract and reveal the novelty and originality of the research findings.

Response: (Abstract is revised)

Comments: It is also necessary to align the purpose of the study with the literature review in the paper. 

Response: It is done in the conclusion and discussion section in the last paragraph.

Comment: The authors study the impact of acquisition experience, industry connections, and mention only institutional quality and cultural similarities. They contribute to the discussion by examining how these factors affect the performance of acquiring firms after acquisition, but in the abstract and introduction, they only mention the conclusions from research on cultural differences and institutional quality.

Response: The abstract is revised and introduction is revised there is complete detail on all four hypothesis i:e acquisition experience, industry relatedness, institutional quality and cultural similarity.

Comment: Add the purpose of the research in the introduction.  Remove the findings from introduction and add in the Conclusion section. 

Response: Findings are removed from introduction and the purpose is added.

Comment: Include recent publications on the topic of research in the literature review, justification of hypotheses between 2020 and 2023. There have been a significant number of such publications. Some examples include:

Response: All recent publications are added.

Liu, Y., Vrontis, D., Visser, M., Stokes, P., Smith, S., Moore, N., ... & Ashta, A. (2021). Talent management and the HR function in cross-cultural mergers and acquisitions: The role and impact of bi-cultural identity. Human Resource Management Review, 31(3), 100744.

Khan, Z., Rao-Nicholson, R., Akhtar, P., & He, S. (2021). Cross-border mergers and acquisitions of emerging economies' multinational enterprises—The mediating role of socialization integration mechanisms for successful integration. Human Resource Management Review, 31(3), 100578.

Caiazza, S., Galloppo, G., & Paimanova, V. (2021). The role of sustainability performance after merger and acquisition deals in short and long-term. Journal of Cleaner Production, 314, 127982.

Bhasin, N., & Garg, S. (2020). Impact of institutional environment on inward FDI: A case of select emerging market economies. Global Business Review, 21(5), 1279-1301.

Xu, K., Hitt, M. A., Brock, D., Pisano, V., & Huang, L. S. (2021). Country institutional environments and international strategy: A review and analysis of the research. Journal of International Management, 27(1), 100811.

Comments: The authors emphasize that they are studying their question using the example of French companies.

In conclusion, they show whether there are differences between French companies and companies from other countries based on earlier studies on similar issues. 

Hypothesis 1 is formulated on the basis of an obvious fact.  

Add a definition of what the authors mean by "institutional quality" and "criteria for a qualitative institutional environment". 

Add the designations of the components of Models (2) and (3). 

Add abbreviated names of variables in parentheses in Table 3. 

The conclusion is weak, and it is necessary to strengthen it and emphasize its importance for theory, economics, and management.

Highlight the theoretical, economic, and managerial implications of your findings.

Response: All these comments are incorporated

Reviewer 3 Report

Comments and Suggestions for Authors

DEAR AUTHORS: Thank you for submitting your manuscript. I found it interesting and easy to read. Below, I'd like to share some suggestions that hopefully will help you improve it to bring it to the quality required for a publication in our academic journal.

1. ABSTRACT: Please rewrite your abstract in a way that is friendlier, more attractive, and easier to understand. The abstract is the one paragraph that every reader goes through first, before reading the paper. It has to be easy to read, it has to motivate to read further, and it has to be short but comprehensive. Your abstract needs to be edited for English language first and then it needs some spice. Instead of telling the reader what moderators you considered, tell the reader how those moderators affect the outcome variable.

2. INTRODUCTION: I found this section of the paper to be dull and boring. You need, at least in the first paragraph, to motivate the study. The fact that some studies found a positive effect, other studies found a negative effect, is not a motivation in itself. In paragraph 3 (page 2), you talk abut previous studies not taking into account moderating effects of "institutional environment and cultural similarity." (page 2 par 3) Readers will disagree with this statement. There is a plethora of studies on the effects of institutional environment/cultural similarity in the context of M&As. I believe thaty you need to focus your introduction on the phenomenon of interest instead of keeping it broad at the M&A level of interest. This might help with creating a proper motivation for the study.

3. INTRODUCTION: I found paragraph 4 on page 2 the most intriguing. Here you detail the tenets of 4 theories that address organizational performance in the M&A context. According to your abstract, you use one of these. I suggest to move this paragraph earlier in the intro, maybe the 1st one. It might help creating a good motivation on how your study explains effects that other studies using different theories might not.

4. LIT REVIEW: You need to improve this section. After reading it, it feels like an enumeration of papers somewhat related to your dependent variable. I suggest that you rewrite it with one thing in mind: focus on the works that used the same theory to explain effects on your dependent variable in the same context (M&A). 

5. HYPOTHESIS DEVELOPMENT: After going over the arguments for hypotheses, I feel like they are underexplained. The claim of the hypothesis does not flow logically from the arguments presented. Also, the hypothesis is not clearly stated. For example, H2 could be interpreted as comparing horizontal to vertical acquisitions or as comparing long run to short run. You need to make the statement of the hypothesis clearer.

6. DEPENDENT VARIABLE: You have to clearly state what the dependent variable is. You mention "performance." However, performance is measured in many ways and represents many things for different organizations. You need to focus it better. Because it is unclear exactly what you mean by performance, the arguments brought forward in the hypothesis development section are not logical at times. Please revise.

7. METHODOLOGY: I like the way you designed the model. I agree that the  panel design is appropriate. Page 9, first 3 paragraphs, seem like copied from wikipedia. At times, you use the third person to describe yourself which makes me think that these paragraphs were borrowed from a third party like Wikipedia or generativeAI. You need to revise these. For example, page 9 first paragraph :"If a single variable is endogeneous in the whole model, the ordinary OLD becomes inconsistent, and the researcher must deploy a more sophisticated technique."

8. GMM: It is strange to have a page or two on showing why OLS and FE estimators are biased. You should focus on your chosen method. Then explain how it deals with endogeneity.

9. VARIABLES: The manuscript is missing an important section: variable description. I could not find anywhere in the paper how you measured the variables. How do you measure cultural similarity or industry relatedness?Please fix.

10. FINDINGS: I do not understand why your models 1-4 have the same number of observations and why models 5-8 have the same number of observations. Have you restricted the testing in any way? Have you used listwise deletion? You need to explain.

11. DISCUSSION:  The manuscript is missing this section. I believe that the section called "conclusion" serves this purpose. If I'm correct please rename the subtitle. You have to include a summarized discussion of the empirical and theoretical implications.

12.CONCLUSION: This section is missing. What you called 'conclusion" serves more as a "discussion" section. The concluding paragraph should be last and it should be similar to the abstract: one short paragraph that concludes the manuscript by summarizing the purpose of the paper, the data, the most relevant findings and the theoretical/empirical contribution. The manuscript lacks this concluding paragraph. Please add.

Overall a good read. I hope you find my comments helpful as you continue improving the manuscript!

Best wishes and good luck!

Comments on the Quality of English Language

LANGUAGE: The language is ok, but not perfect. There are typos and there are sentences without an active verb including in the abstract! It needs some  editing by an editing service.

Author Response

Reviewer 3: Comments and Suggestions for Authors

DEAR AUTHORS: Thank you for submitting your manuscript. I found it interesting and easy to read. Below, I'd like to share some suggestions that hopefully will help you improve it to bring it to the quality required for a publication in our academic journal.

1. ABSTRACT: Please rewrite your abstract in a way that is friendlier, more attractive, and easier to understand. The abstract is the one paragraph that every reader goes through first, before reading the paper. It has to be easy to read, it has to motivate to read further, and it has to be short but comprehensive. Your abstract needs to be edited for English language first and then it needs some spice. Instead of telling the reader what moderators you considered, tell the reader how those moderators affect the outcome variable. (Abstract is revised)
2. INTRODUCTION: I found this section of the paper to be dull and boring. You need, at least in the first paragraph, to motivate the study. The fact that some studies found a positive effect, other studies found a negative effect, is not a motivation in itself. In paragraph 3 (page 2), you talk abut previous studies not taking into account moderating effects of "institutional environment and cultural similarity." (page 2 par 3) Readers will disagree with this statement. There is a plethora of studies on the effects of institutional environment/cultural similarity in the context of M&As. I believe thaty you need to focus your introduction on the phenomenon of interest instead of keeping it broad at the M&A level of interest. This might help with creating a proper motivation for the study. (Revised)
3. INTRODUCTION: I found paragraph 4 on page 2 the most intriguing. Here you detail the tenets of 4 theories that address organizational performance in the M&A context. According to your abstract, you use one of these. I suggest to move this paragraph earlier in the intro, maybe the 1st one. It might help creating a good motivation on how your study explains effects that other studies using different theories might not. (Revised)
4. LIT REVIEW: You need to improve this section. After reading it, it feels like an enumeration of papers somewhat related to your dependent variable. I suggest that you rewrite it with one thing in mind: focus on the works that used the same theory to explain effects on your dependent variable in the same context (M&A). (Literature review section is improved and some recent published work is also added).
5. HYPOTHESIS DEVELOPMENT: After going over the arguments for hypotheses, I feel like they are underexplained. The claim of the hypothesis does not flow logically from the arguments presented. Also, the hypothesis is not clearly stated. For example, H2 could be interpreted as comparing horizontal to vertical acquisitions or as comparing long run to short run. You need to make the statement of the hypothesis clearer. (Corrected).
6. DEPENDENT VARIABLE: You have to clearly state what the dependent variable is. You mention "performance." However, performance is measured in many ways and represents many things for different organizations. You need to focus it better. Because it is unclear exactly what you mean by performance, the arguments brought forward in the hypothesis development section are not logical at times. Please revise. (The performance measure is ROA and now it is clearly stated. Thanks for identifying).
7. METHODOLOGY: I like the way you designed the model. I agree that the  panel design is appropriate. Page 9, first 3 paragraphs, seem like copied from wikipedia. At times, you use the third person to describe yourself which makes me think that these paragraphs were borrowed from a third party like Wikipedia or generative AI. You need to revise these. For example, page 9 first paragraph :"If a single variable is endogenous in the whole model, the ordinary OLD becomes inconsistent, and the researcher must deploy a more sophisticated technique." (Corrected)
8. GMM: It is strange to have a page or two on showing why OLS and FE estimators are biased. You should focus on your chosen method. Then explain how it deals with endogeneity. (Chosen method is focused and others are removed).
9. VARIABLES: The manuscript is missing an important section: variable description. I could not find anywhere in the paper how you measured the variables. How do you measure cultural similarity or industry relatedness? Please fix. (Variables description is added in appendix).
10. FINDINGS: I do not understand why your models 1-4 have the same number of observations and why models 5-8 have the same number of observations. Have you restricted the testing in any way? Have you used listwise deletion? You need to explain. (In models 1-4, we have different number of observations because in these models we did not include the moderating variables, so there is two more variables in models 5 to 8).
11. DISCUSSION:  The manuscript is missing this section. I believe that the section called "conclusion" serves this purpose. If I'm correct please rename the subtitle. You have to include a summarized discussion of the empirical and theoretical implications. (Added).

12.CONCLUSION: This section is missing. What you called 'conclusion" serves more as a "discussion" section. The concluding paragraph should be last, and it should be similar to the abstract: one short paragraph that concludes the manuscript by summarizing the purpose of the paper, the data, the most relevant findings and the theoretical/empirical contribution. The manuscript lacks this concluding paragraph. Please add. (Revised)

Round 2

Reviewer 1 Report

Comments and Suggestions for Authors

It is better to add some characteristics (such as min, max, mean, SD) of data given in Appendix, Table 1 in a separate table.

Author Response

Reviewer 1

It is better to add some characteristics (such as min, max, mean, SD) of data given in Appendix, Table 1 in a separate table.

Response: Another table is added in the appendix.

Reviewer 2 Report

Comments and Suggestions for Authors

The authors conducted an in-depth analysis, but the conclusions of the article are weak. The «Result and discussion» section are very much disorganized. I recommend separating two sections: discussion and conclusion. Provide managerial, theoretical and research implications as results. Include more limitations and future research directions.

Author Response

Reviewer 2

The authors conducted an in-depth analysis, but the conclusions of the article are weak. The «Result and discussion» section are very much disorganized. I recommend separating two sections: discussion and conclusion. Provide managerial, theoretical and research implications as results. Include more limitations and future research directions.

Response: The discussion and conclusion sections are now separated. Limitations and future research directions have been revised.