Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/288054 
Year of Publication: 
2022
Citation: 
[Journal:] British Journal of Management [ISSN:] 1467-8551 [Volume:] 34 [Issue:] 4 [Publisher:] Wiley [Place:] Hoboken, NJ [Year:] 2022 [Pages:] 2212-2233
Publisher: 
Wiley, Hoboken, NJ
Abstract: 
We examine the effect of bilateral trust on cross‐border mergers and acquisitions (M&As). Using a large European M&A sample, we find that bilateral trust facilitates deal announcement and completion. Bidder and target bilateral trusts towards each other are both important for deal announcement, but only bidder trust towards the target firm matters for deal completion. The effect of bilateral trust on deal completion is amplified in more complex transactions and when bidders face severe liability of foreignness. Moreover, bilateral trust between the parties is also associated positively with merger performance. These results support the importance of bilateral trust as a deal facilitator in negotiation settings characterized by contract incompleteness and liability of foreignness.
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Creative Commons License: 
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Document Type: 
Article
Document Version: 
Published Version

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