Extraversion, individualism and M&A activities

•The intensity of M&A activities is higher in countries with people who are more extraverted.•The intensity of M&A activities is higher in countries with higher individualism.•Individualism has a mediation effect between extraversion and the intensity of M&A activities.

Previous studies have documented that variations in economic and business environments can explain the patterns of mergers and acquisitions (M&A) across different countries. We investigated these patterns from a psychological perspective and found that the personality trait of extraversion and the cultural dimension of individualism (IDV) also affected the patterns of M&A activities across countries. Our results suggest that the psychological characteristics of corporate decision makers play a very important role in the M&A decision-making process, even after controlling for external economic and business factors. Furthermore, IDV significantly mediates the relationship between extraversion and M&A activities. This result provides support for the reverse causation hypothesis.