Publication

Abstract : Top management have long been regarded as key decision-makers in strategic decisions such as international acquisitions. Yet relatively little is known about how directors’ prior experiences and nationalities influence such decisions. This paper focuses on one specific decision associated with international acquisitions, namely the choice of payment mode through cash, equity, or otherwise. Building on information asymmetry and upper echelons theories, we argue that prior international experience and national diversity of top management teams (TMTs) have a non- linear impact on the likelihood of cash and mixed payments over equity-only payments. We also explore the strength of these effects across high- and low-uncertainty target countries. Results from ordered logit analyses of 1,708 international acquisitions completed by 429 UK firms between 1999 and 2008 shed a new light on the circumstances under which TMT international experience and diversity may or may not alleviate information asymmetry in payment mode decisions, hitherto not studied.