The Impact of Organizational Learning on the Cross-Border Acquisition’s Deal Completion and Duration : Evidence from U.S. Insurance Industry

This paper aims to verify the question of whether organizational learning affects the completion likelihood and duration of firms’ CBA (cross-border acquisitions) deal-making process. By drawing on the organizational learning theory, we hypothesize that firms’ past acquisition success, failure and divestiture experiences have positive learning effects that encourage firms to exploit their existing knowledge and explore new knowledge respectively, which in turn increase the likelihood of subsequent acquisition deal completion, as well as reduce the duration of the acquisition process. We test our hypotheses by using data of 937 firm’s cross-border acquisition deals in the U.S. insurance industry from 1998 to 2019. We confirmed that past success and past divesture experiences are positively associated with acquisition completion. We further confirmed that past success and past divesture reduce deal-completion durations. The findings contribute to organizational theory by confirming the firm's accumulated experiences in the past have a positive impact on the deal completion and deal duration of cross-border acquisition.