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Open AccessArticle

Moderating Effect of the Continental Factor on the Business Strategy and M&A Performance in the Pharmaceutical Industry for Sustainable International Business

by Jinhee Kwon 1, Cheong Kim 1,2 and Kun Chang Lee 1,3,*
1
SKK Business School, Sungkyunkwan University, Seoul 03063, Korea
2
Airports Council International (ACI) World, Montreal, QC H4Z 1G8, Canada
3
Samsung Advanced Institute for Health Sciences & Technology (SAIHST), Sungkyunkwan University, Seoul 03063, Korea
*
Author to whom correspondence should be addressed.
Sustainability 2020, 12(12), 4985; https://doi.org/10.3390/su12124985
Received: 20 May 2020 / Revised: 16 June 2020 / Accepted: 17 June 2020 / Published: 18 June 2020
This research analyzed the moderating effects of the continental factor on the relation between the business strategies (cost advantage strategy and differentiation strategy) of the pharmaceutical industry and mergers and acquisitions (M&A) performance. A total of 1303 M&A cases were collected from the Bloomberg database between 1995 and 2016 for the sake of empirical analyses. The independent variables were represented by the cost advantage strategy and the differentiation strategy. The dependent variable was for the M&A performance, which was measured for the changes in ROA (return on assets). The results showed that the cost advantage strategy was advantageous when an Asian firm acquired one in either Asia or Europe. In contrast, when a European company received one in either Europe or Asia, M&A performance also was higher, although the cost was higher. On the other hand, the differentiation strategy was valid only when a European firm acquired one in Asia. The moderating effect of the continental factor was beneficial only in the relation between the cost advantage strategy and M&A performance. These results could help companies make decisions that maximize M&A performance based on continental factors from the perspective of the sustainable international business strategy establishment. View Full-Text
Keywords: pharmaceutical industry; cost advantage strategy; differentiation strategy; M& A performance; continental factors; sustainability in international business pharmaceutical industry; cost advantage strategy; differentiation strategy; M& A performance; continental factors; sustainability in international business
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Kwon, J.; Kim, C.; Lee, K.C. Moderating Effect of the Continental Factor on the Business Strategy and M&A Performance in the Pharmaceutical Industry for Sustainable International Business. Sustainability 2020, 12, 4985.

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