Reasons for M&A: A perspective from senior executives' rural experiences- Evidence from Chinese private listed companies

Mergers and Acquisitions (M&A) are critical strategies that significantly shape a company's direction. By drawing upon imprinting theory, this study analyzes the data of publicly traded companies spanning the years 2007 to 2018 in order to explore the formation of executives' imprints from their rural experiences and their positive impact on M&A decisions. Furthermore, based on the corporate behavior theory, it was also verified that the cooperate aspiration gap is an important factor in promoting the dynamic changes of imprints formed by the rural experiences of executives, which in turn affects the relationship between the rural experiences of executives and corporate M&A decisions. The study reveals that the senior executives' rural experiences significantly boost the propensity of a company adopting M&A as a growth strategy. This tendency is particularly pronounced for younger executives and those less affected by a culture of familism. In addition, the study notes a progressive change in these imprints due to the corporate aspiration gap, which affects M&A strategies. Specifically, when a firm's performance fails to meet its objectives and societal expectations, it strengthens the link between an executive's rural background and the pursuit of M&A for expansion. Conversely, when a firm exceeds these aspirations, the correlation is weakened. By examining how individual imprints are formed, evolve, and impact decision-making, this study provides fresh perspectives on the factors driving corporate M&A decisions.