The Influence Of CEO Attention On M&A:The Moderating Effects Of State Ownership And Ultimate Shareholders' Cash Flow Right

Mergers and Acquisitions(M&A)have gone through a dramatic development in China since 2009,with both the transaction amount and number of M&A increasing.There is no doubt that M&A has become one of the most important strategic choices for Chinese firms to acquire external resources in order to seek rapid growth.Although scholars have paid much attention to what drives and crushes M&A,there was few studies which consider the role of managerial attention played in it.The Attention-based View(ABV)puts forward that CEOs' attention influences firms'strategic decision-making and behavior,indicating CEOs' attention is a good lens for explaining corporate behavior.However,previous studies have not yet systematically revealed the influence mechanism of CEOs' attention on exploratory M&A and exploitative M&A.Therefore,this study aims to reveal the differential effects of CEOs' future focus and external focus on exploratory M&A and exploitative M&A,as well as the moderating effects of corporate governance factors such as state ownership and cash flow right.This study first systematically reviews and sorts out the literature and theories of corporate M&A behavior,managerial attention,state ownership and ultimate shareholder's cash flow right,and establishes the theoretical model.Then,according to the theoretical model,this study examines the influence of CEOs future focus and external focus on exploratory M&A and exploitative M&A respectively.Further,this study introduces statement ownership and cash flow right as the moderating variables to test their moderating effects respectively.Using the unbalanced panel data of Chinese 530 manufacturing firms' M&A activities from 2009-2013 for regression analysis,the study draws the following conclusions.Firstly,both CEOs' future focus and eternal focus increase the possibility of exploratory M&A while decrease the possibility of exploitative M&A.Secondly,state ownership will weaken the positive relationship between CEOs' future focus and exploratory M&A.Thirdly,state ownership will weaken the negative relationship between CEOs' future focus and exploitative M&A and the negative relationship between CEOs' external focus and exploitative M&A.Fourthly,cash flow right will weaken the positive relationship between CEOs' future focus and exploratory M&A and the positive relationship between CEOs' external focus and exploratory M&A.This study applies the paradigm of exploration and exploitation to the research on corporate M&A,thereby enriching the research on M&A types.Based on the ABV,this study reveals the joint effect mechanism of managerial attention and corporate governance factors on the selection of M&A types,thereby developing the research on the ABV and corporate governance.The results show that the rational allocation and distribution of CEOs' attention will be beneficial for firms to effectively adopt exploratory M&A and exploitative M&A.In addition,the state-owned shareholders and ultimate shareholders can play a significant supervisory role in the relationships between CEOs' attention focus and the implementation of different types of M&A in the corporations.