The Impact Of Managers' Overconfidence Heterogeneity On Corporate M&A

The main cause of corporate mergers and acquisitions is the overconfidence of corporate executives.The existing literature mainly discusses manager ' s overconfidence and its relationship with mergers and acquisitions based on the background characteristics of managers.It is found that manager's overconfidence is positively correlated with merger decision-making but negatively correlated with merger performance.,But there is very little literature discussing the heterogeneity of manager overconfidence and manager overconfidence based on psychological roots,and there is no literature discussing the influence of manager ' s overconfidence heterogeneity based on psychological roots on mergers and acquisitions,and there is no literature discussing the regulation of management.Overconfidence heterogeneity and governance factors of the relationship between mergers and acquisitions.Therefore,it is of great significance to explore whether the heterogeneity of managerial overconfidence based on psychological roots is still positively related to M&A decision-making,whether it is still negatively related to M&A performance,and what governance measures should be taken.This article explores whether the overconfidence heterogeneity of managers based on psychological roots can promote mergers and acquisitions,and whether they still have a negative impact on merger performance.Then,from the perspective of internal governance,it discusses the balance of ownership,the proportion of independent directors and the board of directors in internal governance factors.Diligence regulates the influence of managers' overconfidence and heterogeneity on M&A decision-making and its influence on M&A performance.Existing literature finds that there are two typical managerial overconfidence based on psychological roots,namely,overconfidence of over-optimistic manager and overconfidence of control hallucination.These two typical managerial overconfidence are collectively referred to as manager overconfidence.Type heterogeneity,the two types of managerial overconfidence are treated in different combinations,and the overconfidence of strong managers and the overconfidence of weak managers are obtained,collectively referred to as the degree of managerial overconfidence heterogeneity.On the basis of existing research,this paper explores the influence of managerial overconfidence heterogeneity on mergers and acquisitions based on psychological roots,and studies the influence of internal governance factors on the influence of manager's overconfidence heterogeneity on mergers and acquisitions.The specific research content includes four aspect.The first is to study the impact of managerial overconfidence heterogeneity on M&A decisions;the second is to study the impact of equity checks and balances,the proportion of independent directors,and the diligent adjustment of managers' overconfidence heterogeneity on M&A decisions;the third is to study the impact of managerial overconfidence The impact of heterogeneity on M&A performance;the fourth is to study the impact of equity checks and balances,the proportion of independent directors,and the diligence of the board of directors to regulate managers' overconfidence heterogeneity on M&A performance.Through the above research,it has enriched the research perspective on the influence of managerial overconfidence on mergers and acquisitions,as well as the theory of overconfidence,mergers and acquisitions and corporate governance.The samples in this study are all from listed companies that are listed on the Shanghai and Shenzhen Stock Exchanges and implement mergers and acquisitions.The required data are A-share data from 2012 to 2016,but the selected period of M&A performance data is from 2009 to 2016,and the data are all From the Guotaian(CSMAR)database,the regression analysis used in the empirical study includes Xtlogit model regression analysis,Xtprobit model regression analysis,and fixed effects model regression analysis.Research has found that overconfidence of over-optimistic managers and strong managerial overconfidence can significantly positively affect M&A decisions,and both can significantly negatively affect M&A performance;but controlling illusion-type managers' overconfidence can neither significantly positively affect M&A decisions,nor Can not significantly negatively affect the performance of mergers and acquisitions.There are three points of innovation in this research.The first point is reflected in the research perspective,which is to study the influence of managerial overconfidence heterogeneity based on psychological roots on mergers and acquisitions and its internal governance factors.The second point is reflected in the research method,that is,based on the overconfidence of over-optimistic managers and the overconfidence of control hallucinations,the heterogeneity of overconfidence of managers is obtained after different combinations,and the degree of overconfidence of managers is discussed.The impact of heterogeneity on mergers and acquisitions and its internal governance factors.The third point is reflected in the research conclusions.First,in terms of the impact of managerial overconfidence on mergers and acquisitions,it is found that heterogeneous managers 'overconfidence has a large difference in the impact of mergers and acquisitions,although over-optimistic managers ' overconfidence and strong managers 'overconfidence can be significantly positive.Influencing M&A decision-making can significantly negatively affect M&A performance,but controlling the overconfidence of illusory managers cannot significantly positively affect M&A decisions or negatively affect M&A performance.Overconfidence of weak managers can only significantly negatively affect M&A performance.M&A performance.Secondly,in the moderating effect of internal governance factors,equity checks and balances can significantly positively regulate the effects of overconfidence of over-optimistic managers and overconfidence of strong managers on M&A performance;the proportion of independent directors can significantly reversely regulate and control illusion management The influence of overconfidence of the overconfidence of the strong managers and the overconfidence of the strong managers on the M&A decision.