An Empirical Study Of Decision Maker’s Education Backgound And Their M&A Performance

M&A strategy is an important investment activity of a company,and the M&A performance reflects the ability of decision-makers of different companies.Human capital theory holds that the decision-making ability of corporate decision-makers is the external manifestation of human capital stock.Education is an important source of human capital,and the quantity and quality of education investment has an important influence on entrepreneurs’ human capital stock.Education can directly or indirectly affect decision makers’ choices through cognitive structure and risk preference,and ultimately lead to different M&A performance.Based on entrepreneur human capital theory,this study deepens the understanding of the relationship between education and economy,especially the significance of entrepreneur human capital to enterprise and market and the important role of education in the formation of entrepreneur human capital.In order to further verify the impact of education on entrepreneurs’ human capital,this study establishes an empirical model of the relationship between the educational background of corporate decision makers and M&A performance using the research paradigm of the high ladder team theory.According to the theory of excess resources,synergies,market competition,diversification,agency cost,overconfidence and signal transmission,M&A performance can be divided into short-term performance and long-term performance,which can be measured respectively,so as to investigate the different dimensions of corporate decision makers’ capability.Short-term performance use excess of the cumulative returns(CAR)to measure,long-term performance use the change in total assets net profit margin(ΔROA)to measure.The educational background is investigated from the six aspects,including six elements of educational background,school type,school level,professional background,MBA and overseas background.The empirical results show that the education background of decision makers has a significant impact on M&A performance.The educational background of company decision-makers can directly influence M&A decisions through cognition or indirectly through risk appetite,and ultimately lead to different M&A performance.However,the mediating effect of risk appetite is only effective in the short term,but not significant in the long term.Lower risk appetite improves short-term performance.The decision-makers with higher education are more cautious about risk,but the negative effect of direct effect is greater than the positive effect of indirect effect in the short term,which makes the short-term performance of M&A poor.The long-term performance of M&A is improved only when synergies begin to play a role.From the conclusion of school type and professional background,it can be seen that the management and legal knowledge required by the market can only improve the short-term performance of M&A,and the business thinking formed by campus culture is the key to the long-term performance of M&A.Generally speaking,graduating from a key university means receiving a higher quality education.However,the empirical results show that corporate decision-makers graduated from key universities are more prone to prefer risk,which adversely affects the short-term performance of M&A.Moreover,graduates from key universities have no obvious advantages in the long-term performance of M&A.MBA education has a significant impact on the short-term and long-term performance of M&A,which verifies the necessity of the development of higher vocational education.Overseas study has no significant impact on short-term and long-term performance,indicating that overseas study education in China has not played its due role.The empirical results verify the basic viewpoints of human capital theory and further explore the different influences of different aspects of education on human capital and economic development.On the whole,China’s higher education plays a positive role in the cultivation of decision-making talents.Highly educated people have good computing ability and anti-pressure ability,which is conducive to making correct decisions.Although MBA education has some problems,it plays a positive role in the cultivation of decision-making talents.The other dimensions differ from what is expected,demonstrating the complexity of entrepreneurial human capital.Finally,based on the research conclusion,this paper summarizes the enlightenment and Suggestions to our education system and talent training and selection mode.The research results of this paper can also be applied to corporate human resource management and personal career development planning.The empirical conclusions and Suggestions in this paper can be referred to in the cultivation,selection and appointment of decision makers,personal voluntary filling and executive self-improvement.For example,if the company wants to maintain low risk and long-term stable development,it should give priority to the person with high education under the same conditions of other individuals at the present stage.If you want to create good news in the short term and use public opinion to drive up the stock price,you should give priority to graduates from comprehensive colleges and universities,as well as professionals in economic management and law.As for individuals,students who are interested in corporate management can choose finance and economics universities as their priority when filling in their application.