Spillovers in Stakeholder Assessments: Country Reputation Perceptions and Acquisition Completion.

Drawing on the legitimacy spillover perspective on institutional theory, we argue that differentiation in home-host country reputation perceptions triggers the cognitive spillover effect, which reduce stakeholder concerns and resistance to acquisitions and thus facilitate acquisition completion. When an acquirer enters a host country where union authority is stronger, higher labour standards can raise the legitimacy threshold of the host country. When the acquirer is in a politically sensitive industry, the risk of security review is higher due to the industry's strategic importance. Furthermore, negative media coverage of the acquirer is more likely to attract more stakeholder attention, blurring their categorization and judgement based on the country reputation perceptions. Our theoretical arguments are supported by a dataset of Chinese firms from 2009 to 2019. We contribute to research on legitimacy spillover and cross-border acquisitions. [ABSTRACT FROM AUTHOR]