In cross-border mergers and acquisitions (M&As), executives generally pay attention to multiple strategic issues. Since attention is a finite resource, they must allocate it carefully across these competing priorities. The purpose of this paper is to explore whether focusing on a narrow or broad set of strategic issues is conducive to enhancing performance in cross-border M&As.
This paper uses the word frequency statistics of textual analysis and applies the Herfindahl index method to measure strategic attention breadth (SAB). Based on the data of Chinese cross-border M&A deals from 2010 to 2021, this paper uses the OLS regression and Heckman two-stage model to examine the impact of SAB on cross-border M&A performance.
The study shows a significant inverted U-shaped relationship between strategic attention breadth and cross-border M&A performance. A moderate breadth of strategic attention helps executives mitigate the threats of blind spots and cognitive overload in cross-border M&As. Cross-border M&A experience and executives' overseas experience serve as moderating factors, flattening the inverted U-shaped curve.
This paper provides new insights into the importance of strategic attention in international business. It verifies the nonlinear effects of executive attention breadth on cross-border M&A.
