Board size and acquisition outcome: The moderating role of home country formal institutional development

The effect of acquirer's board size on the outcome of an acquisition (i.e., whether an announced deal gets abandoned or completed) was examined on the basis of a sample of 775 cross-border acquisitions. The study took into consideration the moderating effect of formal institutional development of the home country. Results showed that board size was negatively associated with the likelihood of deal abandonment and that this relationship was weaker for home countries where formal institutional development was high. The study contributes to the literature on group decision-making theory, institutional view of corporate governance, and acquisition outcome.