National Feelings or Rational Dealings? The Role of Procedural Priming on the Perceptions of Cross-Border Acquisitions

Authors


  • This research was supported by a grant C242/MSS6E015 from Singapore Management University awarded to the first author. The authors are grateful to Ying-yi Hong and Daphna Oyserman for their helpful advice.

Yuk-yue Tong, School of Social Sciences, Singapore Management University, 90 Stamford Road, Singapore 178903 [e-mail: jtong@smu.edu].

Abstract

Cross-border transactions are often perceived by the general public as national threats instead of rational business deals. We propose two interpretational mindsets that attenuate (transactional mindset) and agitate (categorization mindset) these culturally motivated responses. Three studies were conducted in Singapore and the United States with various cross-border acquisition scenarios. As predicted, transactional mindset, which centers around cost–benefit calculations, nudged participants to evaluate the foreign acquisition more rationally and evoked fewer social–cultural considerations than categorization mindset, which focuses on categorizing and comparison procedures, and when no mindset was primed. Furthermore, the effects of categorization mindset are particularly strong when one perceives the two transacting parties as dissimilar and when he/she identifies closely with the local culture. We conclude that while economic activities such as cross-border acquisitions can inadvertently evoke nationalistic reactions, it is possible to mitigate them or even encourage rational evaluations by influencing people's interpretational mindset.

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