International music preferences as a measure of culture: evidence from cross-border mergers

Figures & data

Figure 1. Histogram of the number of overseas mergers undertaken in our country pairs.

Table 1. Country pairs with top music distance and top number of overseas mergers.

		Music distance	Overseas mergers
Top 10 country pairs with high music distance
Belarus	Japan	0.78	0
Finland	Japan	0.76	3
Japan	Ukraine	0.75	3
Japan	Sweden	0.75	26
Czech	Japan	0.74	11
Japan	Poland	0.73	5
Germany	Japan	0.71	139
Japan	Norway	0.71	9
Brazil	Japan	0.71	42
Japan	Russia	0.71	21
Top 10 country pairs with high overseas mergers
Canada	US	0.18	8513
UK	US	0.18	7102
Germany	US	0.44	2473
France	US	0.37	1845
Australia	US	0.20	1841
Germany	UK	0.35	1534
France	UK	0.32	1339
Germany	France	0.45	998
Japan	US	0.64	901
Norway	Sweden	0.41	866

Table 2. Descriptive statistics.

	Mean	Median	S.D	Min	Max	N
Number of overseas mergers	251	47.00	856	0.00	8513	190
Number of overseas mergers / domestic mergers	0.03	0.01	0.05	0.00	0.37	190
Music distance	0.48	0.47	0.12	0.18	0.78	190
Ln Power distance	2.72	3.00	1.01	0.00	4.14	153
Ln Individualism distance	2.84	3.04	0.85	0.00	4.13	153
Ln Masculinity distance	3.00	3.22	0.93	0.00	4.51	153
Ln Uncertainty avoidance distance	2.94	3.14	0.88	0.00	4.20	153
Ln Long term orientation distance	3.00	3.19	0.87	0.41	4.22	190
Ln Indulgence distance	2.99	3.28	0.96	0.00	4.43	190
Ln Facebook connections	1.23	1.24	1.23	−1.50	4.86	171
Flight time between capitals	6.81	6.49	6.06	0.21	21.59	190
Shared border	0.11	0.00	0.31	0.00	1.00	190
Shared continent	0.51	1.00	0.50	0.00	1.00	190
At least one shared language	0.21	0.00	0.40	0.00	1.00	190
Shared religion	0.18	0.00	0.38	0.00	1.00	190
Shared history	0.09	0.00	0.29	0.00	1.00	190
Shared law	0.51	1.00	0.50	0.00	1.00	190
Educational distance	1.44	1.00	1.13	0.00	4.00	190
Ln Tax distance	1.98	2.11	0.78	0.01	3.19	190
Ln GDP distance	9.17	9.50	1.21	2.23	10.77	190
Ln GDP	10.98	11.03	0.33	9.88	11.54	190
GDP growth	0.08	0.07	0.02	0.05	0.15	190
Exchange rate distance	0.19	0.07	0.29	0.00	1.13	190
Economic freedom distance	0.79	0.62	0.59	0.00	2.36	190
International trade	0.71	0.68	0.22	0.26	1.33	190
Tourism distance	4.93	5.06	2.93	0.01	12.07	190

Note: This table reports descriptive statistics. N indicates the number of country pairs available in our dataset. We average all years into one observation per country pair.

Table 3. Pearson correlation matrix (* indicates Pearson correlation coefficients that are significant at the 0.1% level).

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)	(11)	(12)	(13)
(1) Number of overseas mergers / domestic mergers
(2) Music distance	−0.41*
(3) Ln Power distance	−0.29*	0.25
(4) Ln Individualism distance	−0.31*	0.21	0.40*
(5) Ln Masculinity distance	−0.19	0.37*	0.08	−0.05
(6) Ln Uncertainty Avoidance Distance	−0.11	0.13	0.47*	0.21	0.09
(7) Ln Long term orientation distance	−0.16	0.24*	−0.04	0.06	−0.05	0.01
(8) Ln Indulgence distance	−0.21	0.34*	0.42*	0.34*	−0.01	0.40	0.23
(9) Ln Facebook connections	0.52*	−0.53*	−0.35*	−0.48*	−0.04	0.00	−0.18	−0.32*
(10) Flight time between capitals	−0.37*	0.21	−0.02	0.25	−0.06	−0.09	0.26*	0.08	−0.31*
(11) Shared Border	0.46*	−0.25*	−0.10	−0.19	−0.19	−0.16	−0.13	−0.25*	0.51*	−0.4*
(12) Shared continent	0.36*	−0.26*	0.01	−0.26*	0.00	0.08	−0.24	−0.07	0.34*	−0.85*	0.34*
(13) At least one shared language	0.25*	−0.42*	−0.26	−0.17	−0.11	−0.15	−0.10	−0.31*	0.23	0.05	0.25*	−0.07
(14) Shared religion	0.41*	−0.23	−0.03	−0.01	−0.14	−0.31	−0.20	−0.08	0.06	−0.09	0.24*	0.08	0.20
(15) Shared history	0.32*	−0.17	0.06	−0.09	−0.05	−0.09	−0.10	−0.10	0.34*	−0.21	0.65*	0.18	0.24
(16) Shared law	0.14	0.12	0.05	−0.19	0.06	−0.20	−0.08	−0.035	0.01	−0.12	0.13	0.17	0.08
(17) Educational distance	0.10	−0.04	−0.05	0.01	0.09	−0.02	0.04	−0.02	−0.02	−0.10	−0.09	0.05	−0.04
(18) Ln Tax distance	−0.01	0.05	0.03	−0.04	−0.01	−0.07	0.05	−0.03	−0.08	0.07	0.00	−0.09	−0.17
(19) Ln GDP distance	−0.17	0.09	0.33*	0.21	−0.07	0.09	−0.04	0.20	−0.06	−0.10	−0.05	0.07	−0.06
(20) Ln GDP	0.25*	−0.13	−0.31*	−0.22	0.21	0.08	−0.04	−0.23	0.10	−0.05	−0.12	−0.01	−0.01
(21) GDP growth	−0.22	0.04	0.33*	0.07	−0.06	0.07	0.04	0.19	0.09	−0.20	0.24*	0.26*	−0.17
(22) Exchange rate distance	−0.09	0.07	0.22	0.23	−0.05	0.04	0.07	0.29*	−0.11	0.19	−0.09	−0.22	0.01
(23) Economic freedom distance	−0.35*	0.19	0.52*	0.53*	−0.14	0.26	0.09	0.40*	−0.22	0.08	−0.14	−0.06	−0.01
(24) International trade	0.05	−0.06	−0.10	−0.22	0.10	−0.01	−0.05	0.08	0.19	−050*	0.14	0.47*	−0.13
(25) Tourism distance	−0.04	−0.15	0.04	−0.04	0.01	−0.10	−0.07	−0.09	0.01	0.06	0.05	0.00	0.04
	(14)	(15)	(16)	(17)	(18)	(19)	(20)	(21)	(22)	(23)	(24)
(15) Shared history	0.18	1.00
(16) Shared law	0.24*	0.14	1.00
(17) Educational distance	0.10	−0.04	0.12	1.00
(18) Ln Tax distance	−0.09	−0.02	−0.09	0.06	1.00
(19) Ln GDP distance	0.00	−0.05	−0.04	−0.02	−0.09	1.00
(20) Ln GDP	−0.13	−0.13	−0.35*	0.13	−0.02	−0.11	1.00
(21) GDP growth	−0.12	0.26*	0.15	−0.11	0.09	0.23	−0.60*	1.00
(22) Exchange rate distance	0.11	−0.02	0.05	0.10	−0.05	0.04	−0.22	−0.16	1.00
(23) Economic freedom distance	−0.19	−0.10	−0.11	−0.12	−0.01	0.54*	−0.38*	0.33*	−0.01	1.00
(24) International trade	0.11	0.03	0.04	0.22	−0.02	0.14	−0.17	0.33*	−0.05	0.01	1.00
(25) Tourism distance	−0.05	0.05	−0.21	−0.11	−0.02	0.18	0.05	0.28*	−0.16	0.02	−0.04

Table 4. Determinants of music distance.

	Music distance
Dependent variable:	(1)	(2)	(3)	(4)	(5)	(6)
Ln power distance	0.016					0.005
	(1.59)					(0.35)
Ln individualism distance	0.016*					0.004
	(1.79)					(0.39)
Ln masculinity distance	0.046***					0.046***
	(5.63)					(5.65)
Ln uncertainty avoidance distance	−0.007					0.008
	(−0.55)					(0.72)
Ln long term orientation distance	0.026***					0.022**
	(2.83)					(2.24)
Ln indulgence distance	0.017					0.017*
	(1.46)					(1.74)
Ln Facebook connections		−0.051***				−0.038***
		(−7.78)				(−2.88)
Flight time between capitals			−0.001			−0.001
			(−0.36)			(−0.28)
Shared border			−0.069***			0.106**
			(−2.80)			(2.15)
Shared continent			−0.058			−0.024
			(−1.61)			(−0.77)
At least one shared language				−0.108***		−0.077***
				(−4.87)		(−3.36)
Shared religion				−0.055***		−0.034
				(−2.97)		(−1.48)
Shared history				−0.033		−0.008
				(−1.13)		(−0.17)
Shared law				0.049***		0.019
				(3.08)		(0.98)
Educational distance				−0.006		0.001
				(−0.93)		(0.19)
Ln tax distance					0.007	−0.007
					(0.70)	(−0.70)
Ln GDP distance					0.003	−0.001
					(0.32)	(−0.14)
Ln GDP					−0.017	−0.093
					(−0.55)	(−1.17)
GDP growth					0.187	−0.033
					(0.36)	(−0.03)
Exchange rate distance					0.015	−0.069**
					(0.58)	(−2.05)
Economic freedom distance					0.029	−0.027
					(1.41)	(−0.87)
International trade					−0.046	−0.067
					(−1.05)	(−1.33)
Tourism distance					−0.007**	−0.001
					(−2.27)	(−0.24)
Constant	0.132**	0.543***	0.522***	0.497***	0.648*	1.383
	(2.48)	(48.02)	(12.52)	(36.72)	(1.82)	(1.52)
N	153	171	190	190	190	136
R2 adjusted	0.261	0.283	0.097	0.24	0.076	0.576

Note: This table explores determinants of music distance. T-statistics are shown in parentheses. *, **, and *** indicate statistical significance at the 10, 5, and 1% levels, respectively.

Table 5. Determinants of cross-border mergers: Univariate results.

	Number of overseas mergers / domestic mergers
Dependent variable:	beta coeff.	Constant	N	Chi-square	Pseudo R-square
Music distance	−5.616***	−1.034***	190	104.327	0.053
	(−10.21)	(−4.22)
Ln Power distance	−0.357***	−2.449***	153	8.653	0.020
	(−2.94)	(−7.39)
Ln Individualism distance	−0.452***	−2.145***	153	14.657	0.024
	(−3.83)	(−6.21)
Ln Masculinity distance	−0.279**	−2.544***	153	4.814	0.010
	(−2.19)	(−6.42)
Ln Uncertainty avoidance distance	−0.165	−2.874***	153	1.809	0.003
	(−1.34)	(−7.74)
Ln Long term orientation distance	−0.271***	−2.721***	190	10.704	0.008
	(−3.27)	(−10.86)
Ln Indulgence distance	−0.299***	−2.656***	190	13.144	0.013
	(−3.63)	(−11.19)
Ln Facebook connections	0.676***	−4.624***	171	126.688	0.086
	(11.26)	(−30.10)
Flight time between capitals	−0.142***	−2.829***	190	31.398	0.054
	(−5.60)	(−18.62)
Shared border	1.433***	−3.795***	190	34.639	0.046
	(5.89)	(−34.44)
Shared continent	1.302***	−4.361***	190	34.871	0.043
	(5.91)	(−24.33)
At least one shared language	0.797***	−3.728***	190	10.397	0.017
	(3.22)	(−28.97)
Shared religion	1.233***	−3.866***	190	35.011	0.041
	(5.92)	(−25.74)
Shared history	1.127***	−3.686***	190	13.478	0.024
	(3.67)	(−32.88)
Shared law	0.466*	−3.770***	190	3.591	0.007
	(1.90)	(−18.43)
Educational distance	0.137	−3.716***	190	2.283	0.003
	(1.51)	(−18.13)
Ln Tax distance	−0.029	−3.449***	190	0.037	0.000
	(−0.19)	(−11.72)
Ln GDP distance	−0.176***	−1.917***	190	12.704	0.008
	(−3.56)	(−4.28)
Ln GDP	1.585***	−21.012***	190	10.723	0.024
	(3.27)	(−3.94)
GDP growth	−21.911***	−1.858***	190	16.395	0.019
	(−4.05)	(−4.35)
Exchange rate distance	−0.56	−3.410***	190	1.986	0.003
	(−1.41)	(−24.88)
Economic freedom distance	−1.284***	−2.724***	190	31.322	0.046
	(−5.60)	(−15.01)
International trade	0.385	−3.781***	190	0.805	0.001
	(0.90)	(−11.35)
Tourism distance	−0.022	−3.397***	190	0.678	0.001
	(−0.82)	(−19.57)

Note: This table reports the univariate results of the determinants of the number of overseas mergers divided by the number of domestic mergers. The main independent variable of interest is Music Distance. Z-statistics are shown in parentheses. *, **, and *** indicate statistical significance at the 10, 5, and 1% levels, respectively.

Table 6. Determinants of cross-border mergers: Multivariate results.

	Number of overseas mergers / domestic mergers
Dependent variable:	(1)	(2)	(3)	(4)
Music distance	−5.616***	−3.766***	−2.911***	−3.336***
	(−10.21)	(−3.33)	(−4.12)	(−5.52)
Ln power distance		−0.204		−0.154**
		(−1.22)		(−2.32)
Ln individualism distance		−0.299**		−0.147**
		(−2.42)		(−1.98)
Ln masculinity distance		−0.097		−0.09
		(−0.71)		(−1.47)
Ln uncertainty avoidance distance		0.028		0.108
		(0.14)		(1.02)
Ln long term orientation distance		−0.191*		0.14
		(−1.84)		(1.46)
Ln indulgence distance		0.178		0.093
		(1.38)		(1.29)
Ln Facebook connections			0.459***	0.353***
			(4.49)	(4.38)
Flight time between capitals			−0.081***	−0.099***
			(−3.79)	(−5.54)
Shared border			0.052	0.128
			(0.23)	(0.49)
Shared continent			−0.048	−0.063
			(−0.17)	(−0.25)
At least one shared language			−0.05	−0.061
			(−0.29)	(−0.40)
Shared religion			0.950***	0.978***
			(6.10)	(5.95)
Shared history			0.27	0.189
			(1.28)	(0.78)
Shared law			0.173	0.316**
			(0.95)	(2.24)
Educational distance			0.079	0.036
			(1.50)	(0.69)
Ln Tax distance			0.09	0.146**
			(0.90)	(2.00)
Ln GDP distance			−0.04	−0.049
			(−0.64)	(−0.91)
Ln GDP			0.578	0.042
			(1.54)	(0.08)
GDP growth			−6.643	−5.115
			(−0.81)	(−0.58)
Exchange rate distance			0.561*	0.361
			(1.77)	(1.10)
Economic freedom distance			−0.051	0.209
			(−0.21)	(0.89)
International trade			−1.193***	−1.031**
			(−2.75)	(−2.52)
Tourism distance			0.013	0.039
			(0.51)	(1.64)
Constant	−1.034***	−0.146	−8.112*	−2.059
	(−4.22)	(−0.19)	(−1.78)	(−0.32)
N	190	153	171	136
Chi-square	104.327	43.735	646.429	734.807
Pseudo R-square	0.053	0.06	0.166	0.154

Note: This table reports the multivariate results of the determinants of the number of overseas mergers divided by the number of domestic mergers. The main independent variable of interest is Music Distance. Z-statistics are shown in

Table 7. Robustness tests.

Dependent variable:	Number of overseas mergers / domestic mergers	Abnormal number of overseas mergers / domestic mergers	Ln Number of overseas mergers	Number of overseas mergers / domestic mergers only over $1m deals	Number of overseas mergers / domestic mergers	Number of overseas mergers / domestic mergers	Number of overseas mergers / domestic mergers	Number of overseas mergers / domestic mergers
	Negative
Estimation:	binomial	Poisson	Poisson	Poisson	Poisson	Poisson	Poisson	Poisson
Different treatments on independent variables:	None	None	None	None	Ln Music distance	Add: Ln Number of listed firms	No logarithm used	Orthogonalized
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
Music distance	−3.336***	−0.957***	−1.037***	−1.420***		−3.779***	−3.233***	−0.609***
	(−5.52)	(−7.04)	(−4.06)	(−4.05)		(−4.62)	(−4.51)	(−7.82)
Ln music distance					−1.166***
					(−5.05)
Ln number of listed firms						−0.099
						(0.39)
Previous controls	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Constant	−2.059	−2.413**	−6.318**	−5.29	−3.92	−1.516	−2.248*	−4.928
	(−0.32)	(−2.40)	(−2.41)	(−1.49)	(−0.58)	(0.82)	(−1.75)	(−0.77)
N	136	136	136	136	136	136	136	136
Chi-square	734.807	904.275	598.370	406.830	693.621	723.560	665.809	734.807
Pseudo R-square	0.154	0.065	0.136	0.182	0.153	0.154	0.151	0.154

Note: This table reports several robustness tests for the main relation as shown earlier in Table 6. Z-statistics are shown in parentheses. *, **, and *** indicate statistical significance at the 10, 5, and 1% levels, respectively.

Table 8. Placebo tests.

	Number of overseas mergers /
	domestic mergers	Ln number of
	1980–1994	domestic mergers
Dependent variable:	(1)	(2)
Music Distance	0.247	−0.108
	(0.29)	(−1.32)
Previous Controls	Yes	Yes
Constant	−6.929	−2.037***
	(−0.90)	(−3.38)
N	136	136
Chi-square	1005.686	747.689
Pseudo R-square	0.178	0.033

Note: This table undertakes two placebo tests for the main relation shown earlier in Table 6. Z-statistics are shown in parentheses. *** indicates statistical significance at the 1% level.

Data availability statement

The data that support the findings of this study are available from the author upon reasonable request.