How Does Community Political Ideology Affect Foreign Firms' M&A Deals' Completion?
Source: https://bm.hkust.edu.hk/bizinsight/2025/12/how-does-community-political-ideology-affect-foreign-firms-ma-deals-completion Parent: https://bm.hkust.edu.hk/bizinsight/biztalks
[ BizTalks ]
How Does Community Political Ideology Affect Foreign Firms' M&A Deals' Completion?
06 Dec 2025
Lee Heng Fellow, Associate Professor
The intensifying rivalry between major global economies highlights the need to better understand the politicized nature of international business. This study introduces a new political factor—community political ideology (i.e., the dominant political ideology along the liberalism-conservatism spectrum among a community’s members)—and examines its influences on cross-border M&As between countries that are deemed as economic and political rivals. Using Chinese cross-border M&As in the U.S. as a research context, we predict that these M&As are less likely to be completed in U.S. communities with a higher proportion of conservative residents. Moreover, the negative effect of community conservatism on the completion of Chinese M&A deals is further enhanced when the deals target U.S. sensitive industries or when the target communities suffer from greater economic distress. Taken together, our findings suggest that community political ideology can be important factors influencing the completing of cross-border M&As especially for acquiring firms from rival countries.