FACULTY AND RESEARCH

Cross-border acquisitions are growing in volume and global economic importance, yet a considerable number end in failure. Many of these failures may be linked to people management-related issues. We extend this stream of research by investigating the impact of the acquirer's aggregate human resource management (HRM) quality on cross-border acquisition divestment. Our empirical analysis uses a panel database of 4128 cross-border acquisition/year observations and an event history design. The findings confirm a curvilinear relationship and suggest that acquisition failures are not merely associated with poor HRM quality, but also with very high levels of HRM quality, that is, with both extremes. Moreover, our results show that financial slack has a significant moderating effect on the curvilinear relationship between HRM quality and the likelihood of acquisition divestment. Overall, our study reveals boundary conditions for the widely demonstrated positive relationship between HRM quality and organizational performance in an acquisition context.