1. ¹Department of Management and Organisation, Swedish School of Economics, Helsinki, Finland
2. ²INSEAD Euro-Asia and Comparative Management Research Centre, Fontainebleau, France
3. ³INSEAD, Singapore
4. ⁴Ecole de Management de Lyon, Lyon, France

Correspondence: I Björkman, Department of Management and Organisation, Swedish School of Economics (Hanken), Post Box 479, Helsinki 00101, Finland. Tel: +358 (0)9 43133273; Fax: +358 (0)9 43133275; E-mail: Ingmar.bjorkman@hanken.fi

Received 29 April 2004; Revised 5 February 2006; Accepted 24 October 2006; Published online 17 May 2007.

Abstract

This paper presents an integrative model of the impact of cultural differences on capability transfer in cross-border acquisitions. We propose that cultural differences affect the post-acquisition capability transfer through their impact on social integration, potential absorptive capacity, and capability complementarity. Two dynamic variables – the use of social integration mechanisms, and the degree of operational integration of the acquired unit – are proposed to moderate the effects of cultural differences on social integration and potential absorptive capacity. The implications for acquisition research and practice are discussed.