Internationalization of Chinese firms in Europe: the role of cultural differences in the functioning of a M&A in the automotive industry

During the last decade China has become an important international investor and its firms have also begun to invest in Europe targeting strategically important and high-tech industries. However, there are many Chinese firms that have learned some hard lessons from European acquisitions. Among the various factors that can hinder or facilitate the success of Chinese investments, we devote special attention to the role of cultural differences. Drawing from international literature on cross-border acquisitions and cross-cultural management, we assume that national culture influences corporate strategies and structures as well as managers’ behaviour. To understand fully differences and modes of interactions among headquarters and subsidiaries, we decided to analyse a single case study. A qualitative research method appeared more suitable for achieving these mentioned objectives. Findings highlight the significant role of cultural values. Differences arose in the headquarter’s strategic choices and management cultures of the headquarters and its subsidiaries. We observed some attempts to manage cultural differences, however, the Chinese investor did not really undergo a process of learning and adaptation to the local dimension.