The role of geographic distance in completing related acquisitions: Evidence from U.S. chemical manufacturers

Published

Journal Article

Copyright © 2015 John Wiley & Sons, Ltd. Acquisitions often do not reach completion when buyers' initial evaluations change during post-announcement due diligence investigations, but research offers only limited explanations for when such deal-cancelling new information will be most common. Drawing from the spatial geography and acquisition strategy literatures, we argue that successful completion of acquisitions can be partially explained by their spatial characteristics. We start by predicting that geographic distance has a particularly strong impact in reducing the likelihood of completing related acquisitions; we then identify contingencies based on multiple forms of direct, contextual, and vicarious experience that can help acquirers overcome the constraints of distance. We test the arguments with a sample of 1,603 domestic acquisitions announced by 724 U.S. chemical manufacturing firms between 1980 and 2004. Copyright © 2015 John Wiley & Sons, Ltd.

Full Text

Duke Authors

Cited Authors

  • Chakrabarti, A; Mitchell, W

Published Date

  • April 1, 2016

Published In

Volume / Issue

  • 37 / 4

Start / End Page

  • 673 - 694

Electronic International Standard Serial Number (EISSN)

  • 1097-0266

International Standard Serial Number (ISSN)

  • 0143-2095

Digital Object Identifier (DOI)

  • 10.1002/smj.2366

Citation Source

  • Scopus