Human Capital in Cross-border Mergers and Acquisitions: An Exaptation Perspective

While negotiating cross-border mergers and acquisitions, the firm must have a stronger human capital resource (HCR) competent enough to have an in-depth understanding of a foreign country's complexities, e.g., exchange rate fluctuations, systems, culture, and respond accordingly. Since HCR is greatly intangible and cannot be fully acquired externally, firms are required to develop these capabilities internally to successfully execute this process. Especially while engaging in the first CBMA, organizations have limited capabilities to acquire and integrate external resources. Drawing from Santangelo and Stucchi (2018), we introduce the concept of exaptive human capital (EHC) resource, the re-use of HCR's control and coordination capabilities attained domestically for a specific purpose, which could play an instrumental role while going for cross-border mergers and acquisitions. We argue that specific EHC capabilities of control and coordination are more relevant for the firms engaging in first-time cross-border mergers and acquisitions; however, these capabilities become irrelevant in subsequent CBMA involvement. The study draws a testable econometrical framework, modelling CBMA, and EHC. The proposed model needs to be empirically tested.