Knowledge transfer in acquisitions: A socio-cultural perspective

Acquisitions are among the most important growth and internationalization strategies for firms. Nevertheless, many acquisitions fail to create financial value for acquirers. An emerging body of literature that takes a knowledge-based view points to post-acquisition knowledge transfer as a key value creation mechanism in acquisitions. This stream of research has tended to view synergies as the result of either accessing new and unique knowledge from the partner firm, exploiting superior knowledge in the partner firm that makes it more effective, or by combining the knowledge of the acquisition partners in new ways. Whilst previous research has shed light on post-acquisition knowledge transfer, there are a number of gaps in our understanding of the factors that influence it. First, few studies have examined the relative impact of different knowledge transfer determinants. More specifically, socio-cultural and political factors have received less attention. Whilst case studies have included more variables, the small sample size of the studies limits their generalizability. Second, indirect relationships such as moderating variables and antecedents to independent variables have been explored less. Third, few larger-scale studies have examined knowledge transfer both from the acquiring firm to the target and from the target firm to the acquirer. The aim of this thesis is therefore to examine how socio-cultural factors, political factors and knowledge characteristics influence post-acquisition knowledge transfer in different directions: from the acquiring firm to the target and from the target firm to the acquirer. The thesis consists of four essays: one conceptual and three quantitative. These essays examine post-acquisition knowledge transfer from different theoretical perspectives. The empirical essays draw on unique datasets based on surveys that cover acquisitions by Finnish firms in Finland and abroad between 2001 and 2010. More specifically, Essay 1, which is a conceptual paper, develops an integrative model of post-acquisition knowledge transfer, emphasizing the dynamic aspects of the process. Essay 2 focuses on socio-political aspects of post-acquisition knowledge transfer, highlighting the negative effects of the ‘fear of exploitation’ on the part of the sender and the ‘fear of contamination’ on the part of the receiver on the process. Essay 3 connects the cultural and knowledge transfer discourses in acquisitions by examining how the causal ambiguity of the sender’s knowledge, cultural integration and partner attractiveness impact post-acquisition knowledge transfer both directly and indirectly. Finally, Essay 4 develops a multi-level model of post-acquisition knowledge transfer determinants and their antecedents. It examines the indirect effects of knowledge complementarity and complexity and of the target’s cultural acceptance and preservation on post-acquisition knowledge transfer through their influence on cultural learning and collective teaching initiatives on the part of the acquiring and target firms. This thesis offers three main contributions. First, by drawing on different management theories, this thesis shows the relative impact of socio-cultural and political factors and of knowledge characteristics on post-acquisition knowledge transfer. Second, the study highlights differences between how the factors mentioned above influence knowledge transfer, depending on the direction – from the acquirer to the target or vice versa. Third, by examining moderating relationships and antecedents to independent variables, the study sheds light on the more complex and indirect relationships between knowledge transfer determinants