The influence of country image and acquirer's corporate reputation in cross-border acquisitions: a consumer perspective

This research investigates, in cross-border acquisitions, the effect of country image on the relationship between acquirer's corporate reputation and consumers’ repurchase intentions of the products of the post-acquisition target. The study considers an Italian target firm having high reputation and compares four foreign acquiring firms showing a different combination of corporate reputation (low/high) and country image (negative/positive). We found that both corporate reputation and country image have a significant impact on Italian consumers’ repurchase intentions of products of the post-acquisition target. Furthermore, results indicate a highly significant interaction effect: a positive country image of the country of the acquirer leads to a higher level of repurchase intentions only in case of a high corporate reputation. Conversely, a positive country image cannot compensate for the lower corporate reputation. The research could be of value and interest because states that, in a cross-border acquisition, a high acquirer’s corporate reputation is the most important factor that affects consumers’ repurchase decisions and consequently the success of the acquisition. Therefore, the advice is to strengthen or improve corporate reputation.