Top Management Team Functional Background And Corporate Venture Capital

Since 2013,China's venture capital market has developed rapidly.The amount and quantity of incumbent enterprises participating in the venture capital market have reached new highs,and corporate venture capital(CVC)has become an important form for incumbents to seek sustainable competitive advantages.Scholars at home and abroad are enthusiastic about CVC research.Although the existing studies reveal its value-added mechanism in detail,there are few studies on the motivation of incumbents to participate in CVC.In particular,it is rare to analyze the antecedents of CVC from the perspective of corporate strategy decision-makers,namely the cognition of top management teams.The upper echelons theory points out that as the strategic decision maker of enterprises,the characteristics of top managers shape their cognition and preference,and the strategic decisions are the reflection of the characteristics of top managers.So,what is the internal mechanism of top management team's background characteristics affecting CVC? What are the situational conditions of top management team's impact on CVC? These questions remain unanswered.The upper echelons theory attributes the strategic behavior and performance results of enterprises to the heterogeneity of managers' characteristics.The theory points out that managers' acquired experience makes them have different background characteristics,which will lead to their cognitive differences and will affect their judgment of the environment and the decision-making of enterprises in the long run.Therefore,in order to better understand the strategic decisions,it is necessary to comprehensively understand and analyze the background characteristics of the top management team.However,most of the existing researches adopt the "black box" analysis model,directly taking the demographic characteristics of top managers as the proxy variable of their cognitive model,and studying the influence of the background characteristics of top managers on the strategic decision-making,ignoring the real psychological process.Based on the study of bounded rationality and management cognition,the attentionbased view provides a new perspective for deciphering the mechanism of the top management team characteristics acting on the strategic decision-making.This theory proposes that attention is an important reflection of top managers' cognition,whose attention allocation varies according to the background characteristics,and the strategic behavior of enterprises depends on the attention focus of decision-makers.In other words,the attention-based view regards the background characteristics of the top management team as the predisposing factor of the manager's attention focus,which further influences the strategic decision of the enterprise.This view coincides with the logical analysis framework of the upper echelons theory "background characteristics of the top management team--cognitive model--organizational behavior and results".Therefore,the attention focus is to explain the mediating variable that the characteristics of the top management team affect the strategic decision-making mechanism of the enterprise.By integrating the upper echelons theory and attention-based view,this study takes the functional background as the starting point to compare and analyze the difference in the allocation of attention focus caused by out-put and through-put functions,and further analyzes the influence of the latter on the decision of CVC.In other words,this study reveals the "black box" between the functional background and CVC decision-making from the top management team's attention focus.Specifically,this study selects 657 manufacturing enterprises listed in Shanghai and Shenzhen A-share markets in 2016 as research objects,takes STATA 14.0 as the analytical tool,and uses causal step regression method to examine the direct effect of top management team functional background on CVC decision making and the mediating effect of attention focus.In addition,Sobel test and Bootstrap method are used to test the robustness of the mediating effect.MPLUS7.0 is used to analyze the mediated moderator model of option incentive.The empirical results of this study show that :(1)the proportion of top management team output functional background is positively correlated with external attention focus and CVC;(2)the attention focus plays a partial mediation role between the functional background of the top management team and CVC;(3)option incentive positively moderates the relationship between the background of top management team's out-put functions and external attention focus,and plays a mediated moderator effect in the whole study.The conclusion of this study has important theoretical significance.Firstly,it makes two contributions to the upper echelons theory.On the one hand,from the perspective of managers' attention,this paper explores the internal mechanism of the background characteristics and strategic decisions of the top management team,and tries to answer the inherent "black box" problem of the theory.On the other hand,combined with the findings of the agency theory,expands the application of the upper echelons theory and strengthens the explanatory power of the theory.Secondly,introduces the basic concept of attention into the research topic of CVC and enriches its antecedents.Thirdly,takes the functional background of top management team as a prerequisite factor to shape the focus of managers' attention is a supplement to the attention-based view.In addition,this study also has some practical implications.First,the key to the influence of managers' background characteristics on strategic decision-making lies in their cognitive model.Therefore,enterprises should be good at guiding the attention focus of top management team in the decision-making process.Second,considering the important influence of the background characteristics on the strategic decision,enterprises should pay attention to the characteristics of the top management team from multiple dimensions and consider its possible influence on the strategic decision.Finally,enterprises should also improve the internal incentive mechanism and shape the cognition of the core decision makers.