Strategic Balance of Asymmetric Interdependence and Cross-Border Mergers & Acquisitions

This study contributes to resource dependence theory (RDT) and mergers and acquisitions (M&As) research by examining the nonlinear effect of cohesion on cross-border M&As. We synthesizes the logic of power and the logic of embeddedness to examine how different levels of cohesion between an actor and its partner influence the actor’s constraint absorption strategies, leading to strategic balance of asymmetric interdependence. Using a sample of 56 industries during 2000-2014 in the United States collected from World Input-Output Tables (WIOT) and Securities Data Corporation (SDC), we find an inverted U-shaped relationship between cohesion (i.e., the synthesis of the logic of power and the logic of embeddedness) and cross-border M&As. Meanwhile, the above relationship is negatively moderated by actors’ power advantage.