Foreign equity investment via CD & LD

Data Description

Title: Cultural Distance (CD) in Equity Size Investment Decisions Moderated by Learning Distance (LD) in the ICT Sector
Author: Tariq H. Malik

This dataset was compiled to examine how cultural distance (CD) and learning distance (LD) shape equity size decisions in cross-border ICT investments. It integrates cultural dimensions, firm experience, and legal context to explain how uncertainty influences ownership structures.

Source & Coverage:
Data are drawn from Orbis (Moody’s Unit) covering 2007–2009, including 51,198 equity deals, 19,712 investors, and 32,987 targets across 152 home and 154 host countries. The ICT sector includes hardware, software, telecommunications, media, and biopharma-related ICT firms.

Variables:

Dependent variable: Equity size (% of ownership acquired), log-transformed and standardized.

Independent variables:

Cultural Distance (CD): Hofstede’s five-dimension index (PDI, IDV, MAS, UAI, LTO), standardized 1–10.

Learning Distance (LD): Experience gap between investor and target, derived from prior deal counts (i-LD, t-LD, LDₐᵦₛ).

Controls: Investor type (industrial/institutional/individual), partner-specific and host-country experience, OECD membership combinations, sector dummies, legal system distance (0–4), and year effects (2008, 2009).