Network position of independent director in cross-border mergers and acquisitions

Purpose - The purpose of this paper is to consider the impact of network position of independent directors on the decision-making process of cross-border mergers and acquisitions (CBMAs). Design/methodology/approach - With 912 CBMAs constructed by 431 Chinese-listed corporations from 2006 to 2015, the authors provide graph-theoretical methods to quantify directors' networks and build logistics models of CBMA success and generalized linear model for transaction value. Findings - The authors find that independent directors in central positions of board networks of CBMA significantly strengthen the possibility of success of CBMA and react more positively to large CBMA. The results reveal that state-owned enterprises reduce the importance of independent directors in central positions in assisting successful CBMA, but strengthen the importance in promoting large CBMA. Specifically, majority shareholders counteract the importance of independent directors in central positions in assisting successful CBMA, but improve the importance in promoting large CBMA. Originality/value - The findings suggest that independent directors in central positions, which are embedded in sets of board relationships and interactions, lead to efficient external corporate governance as a mechanism to facilitate a Chinese-listed firm's CBMA decision making.