Impact Of CEO Temporal Focus On Target Selection In Corporate Acquisitions

M＆As is one of the most widely studied areas in the literature of management and strategy（Ferreira et al.,2014）.However,the question of how an acquirer selects one firm as a target over others still needs to be uncovered（Yu et al.,2016）.Furthermore,the literature in the field has a habit of viewing the effects of leadership on M＆A through the lens of observable and behavioral characteristics,such as personality and demography（e.g.,Dutta et al.,2016;Ishii ＆ Xuan,2014;Levi et al.,2014;Wang ＆Yin,2018）.The link between the CEOs’ temporal focus（unobservable characteristics）and their firm corporate M＆A decisions are not yet established well（Shi et al.,2012）.Using a multidimensional framework of CEO temporal focus（past,present,and future）and upper echelon theory,the study intended to show how the CEOs’ temporal focus or cognitive bias（inclination of CEOs focus on either of these temporal dimensions）will influence their firms M＆As target choice.Acquiring firms have options to choose an acquisition target from a pool of their ally vs.non-ally firms,firms operating in their industry vs.other,and firms headquartered in their country vs.outside of their country（Bae et al.,2013;Daher ＆ Ismail,2018;Cho ＆ Arthurs,2018）.Besides,considering behavioral theory,agency theory,and Power perspective,the study was also intended to shows how some contingency variables affect these links.The empirical test was based on sample M＆As deals from two high-tech industries（pharmaceutical and semiconductor）for the years 2014 to 2018.These deals were considered from the SDC Platinum database.The results from the binomial logistic regression analysis of the studies revealed that the CEOs’ future and present temporal focus are positively related to the likelihood of choosing a target from the non-ally firms,firms operating in another industry,and firms headquartered in another country.However,CEOs’ past temporal focus was found negatively linked with the likelihood of choosing a target from the nonally firms,firms operating in another industry,and firms headquartered in another country.As far as the result of the moderating variables is concerned,the organizational slack has found positively moderate the relationship between CEOs’ past temporal focus and acquisition of non-ally firms.The interactions of CEO stock options to future focuses and past focuses are positively associated with the likelihood of diversifying acquisition.While the interactions of CEO stock ownership with future,present,and past temporal focus negatively influence the probability of making a diversifying acquisition.Besides,the interaction of CEOs’ power with the future and present temporal focus found positively affects the chance of cross-border acquisitions,while its interaction with past temporal focus affects negatively.The study tells that future-focused or present-focused CEOs are concerned about advancement and making use of opportunities while making strategic decisions,whereas past focused CEOs are more worried about the risk associated with making strategic decisions.Therefore,these findings uncovered that the CEOs’ temporal focus has an impact on firms’ acquisition target selection.This impact is also contingent on organizational resources（slack resources）and corporate governance variables（CEOs compensation and power）.