Financial Implications of Cultural Distance in Cross-Border M&A

This thesis examines the financial implications of cultural distance in cross-border mergers and acquisitions. The thesis argues that part of this inconsistency follows from a level-of-analysis problem, since distance is typically measured through composite indices of national values while its consequences arise from friction between specific organisations. It proposes that the financial effects of distance depend on the arrangements through which it is managed rather than on its measured magnitude alone, and it identifies monitoring capability and integration capability as the two managerial variables through which measured distance is converted into, or insulated from, financial consequence. The argument is examined through a qualitative comparative case study of three cross-border transactions attempted or completed between 2016 and 2023: the prohibited merger of Deutsche Börse and the London Stock Exchange Group, SoftBank's staged investment in WeWork, and LVMH's acquisition of Tiffany & Co. The cases were selected purposively on outcome variation, so the design illustrates and compares mechanisms rather than estimating their frequency or establishing causation. An explicit identification strategy distinguishes observable cultural friction from economic, regulatory, political and governance conflict, states the conditions under which an episode is attributed to each category, and specifies the evidence that would count against the argument advanced. The evidence is consistent with the proposition that comparable levels of measured distance are associated with different outcomes according to the arrangements through which they are managed. The direction of the effect is established from the case records; its magnitude is not, and the limits of what the available disclosure permits are stated in each case. Each case closes with the alternative explanations that the evidence does not exclude.