Country Brand Equity: The Decision Making of Corporate Brand Architecture in Cross-Border Mergers and Acquisitions

Abstract

Cross-border merger and acquisition (CBM&A) is a dominant and sustainable antagonistic strategy, but a relevant concern like a country has inadequately been emphasized over the five decades of acquisition studies. Therefore, this article attempts to examine the impact of country brand equity (CBE) on corporate brand architecture (CBA) in post-CBM&A. It first originates a hypothetical model esteeming Resource-Based View (RBV) and Industrial Organization (IO) theory following the Structure-Conduct-Performance (SCP) paradigm. Then, it tests the model conducting a web survey on 124 acquiring corporates from 29 countries that accomplished CBM&A transactions between 1990 and 2014. The empirical findings clarify that the market aspect, such as the acquirer’s more substantial country brand equity, indirectly leads to the high degree of CBA standardization in the host market through prioritized intangible and strategic resources—corporate reputation and corporate brand management system. Individually, the acquirer’s corporate reputation cumulatively yields a high degree of CBA standardization with corporate brand power, which has only a direct effect. On the other hand, the corporate brand management system leads to a high degree of CBA standardization cumulatively with corporate reputation. It is deemed that the research findings as a whole reveal a framework for the application of country brand equity and corporate brand architecture in post-CBM&A.