A Study Of Managerial Overconfidence And The M&A Decisions Of The Company

The M&A began in the United States in the1890s has conducted five large M&A waves from now. Today, the global scope is being carried out a large-scale deals mainly transnational M&A, this large-scale transnational M&A is occurring such as Giovanni cobolli gigli M&A Volvo events, Sinopec purchase the western oil companies Argentina business and so on in2010. The studies also found that many factors can drive the merger happens at home and abroad, all these factors include the traditional economic view and the behavioral economics view. In the process of researching these factors driving M&A, these factors can only explain the scale of the high frequency M&A activities happened in today’s society, and the traditional economic view appears insufficient, in1986Roll began to introduce the views of psychology into the management field of study.After this, the scholars started to research this question from the perspective of behavioral economics to explain the frequent large-scale M&A activities in academia, and these studies obtained some conclusions based on the perspective of behavioral economics, Among them about the study of managerial overconfidence also made great achievement, however how to the measure the managerial overconfidence doesn’t reach a consensus standards in the domestic and foreign researchers, in the domestic and foreign researches we will find that most researches have admit that managerial overconfidence will affect the M&A choice of a company. Because of Chinese capital market has some differences with the western countries, directly quoted the western method about managerial overconfidence may not fully comply with Chinese reality, and this conclusion also can not guide and explain the M&A activities in China very good, so this paper measure the managerial overconfidence based on the studies of home and abroad, modified the measures and select the actual standard in our country. The managerial overconfidence can influence the choice of M&A, most of the domestic and foreign researches most adopt empirical method, this method can use the real data to enhance its persuasive, so this paper also uses empirical method to research the influence of managerial overconfidence and the choice of M&A, based on the listed companies in Chinese.This paper researches the companies listed in SSE and Shenzhen SE during2008～2010, involves1788observations, uses logistic regression as the main regression analysis method, and establishes right model based on the existing research at home and abroad, the conclusions of this paper are follows:(1) The managerial overconfidence will influence the choice of M&A behavior, both positively related;(2) Managerial overconfidence and M&A behavior choice is more significant in non-state listed companies than state-owned companies;(3) A merger history of the listed company’s managerial overconfidence and M&A choice has a more positive relationship than no merger history of the listed company;(4) the proportion of independent directors and M&A decisions has negative correlation, but not significantly.The structure of this paper is as the following:Part1:The introduction. This part Includes selecting background, theoretical significance and practical value, the research framework, technology roadmap the innovation points and the limitations of the study; Part2:Review of literature reviews. First, researching managerial overconfidence of relevant literature in the domestic and foreign, summarizing the main method measuring the confidence, and the research conclusion in domestic and foreign so far; Part3:Theoretical analysis. First, introducing the concept of overconfidence and mergers, the reasons of overconfidence, influence factors and forms of managerial overconfidence, then analyzing the factors driving M&A from the traditional economics and behavioral economics respectively, Second, proposing the hypothesis of this paper based on the theoretical analysis, Part four:The study design. According to the need of the research, I choose the suitable models and be explained variables, explain variables and the control variables, collect the managerial overconfidence measure methods at home and abroad, choose the right data of the listed companies in China to finish this paper; Part5:Empirical test and the results analysis. In this part, first is the descriptive statistics, and second is the empirical analysis, including the correlation analysis and multiple logistic regression analysis, and the robustness inspection; Part6:The study conclusions and policy recommendations. This article summarizes the conclusions of this paper, and then discovering that the question based on the in part5analysis and putting forward some directional policy Suggestions.