The persistent effect of geographic distance in acquisition target selection


Journal Article

Valuable resources often exist at distant points from a firm's current locations, with the result that strategic decisions such as growth have a spatial dimension in which firms seek information and choose between geographically distributed alternatives. Studies show that geographic proximity facilitates the flow of resources, but there is limited understanding of factors that exacerbate or ease the impact of geographic distance when firms seek new resources. This paper argues that thedifficulty of search increases with distance, particularly when search involves greater information processing, but that firms can partially overcome the constraints of distance with direct, contextual, and vicarious learning. We study 2,070 domestic acquisition announcements by U.S. chemical manufacturers founded after 1979. The results demonstrate the persistent effect of spatial geography on organizational search processes. © 2013 INFORMS.

Full Text

Duke Authors

Cited Authors

  • Chakrabarti, A; Mitchell, W

Published Date

  • November 1, 2013

Published In

Volume / Issue

  • 24 / 6

Start / End Page

  • 1805 - 1826

Electronic International Standard Serial Number (EISSN)

  • 1526-5455

International Standard Serial Number (ISSN)

  • 1047-7039

Digital Object Identifier (DOI)

  • 10.1287/orsc.1120.0811

Citation Source

  • Scopus