Study Of Managerial Overconfidence And M&A Behavior Based On The Restrain Factors

In recent years, with the continuous development of our country’s economy, the continuous improvement of the capital market, the demand for enterprises bigger and stronger increasingly strong, the pace of business expansion growing wider, the form of expansion change rapidly, especially in the M&A. Successful M&A can optimize enterprise organizational structure and resources, build and maintain core competitiveness in an all-round way, in order to promote the development and implementation of the company long-term strategy. Under the impact of economic globalization, M&A will become the only way to urge Chinese enterprises bigger and stronger and enter the international market. However, M&A also brings a series of risks. Numerous studies show that M&A cannot effectively improve enterprise operating performance, on the contrary could have a negative impact to the master companies. What reasons driving the wave of M&A happen again and again? This is the traditional finance theory cannot explain. Therefore, with the development of behavioral finance, policy-maker behavior characteristics are used to study M&A behavior more and more theoretical and practical significance. Then further, how to reduce the negative behavior because of Managerial Overconfidence? Whether there is any factors restrain Managerial Overconfidence? Can these factors play an inhibitory effect in the relation between Managerial Overconfidence and M&A behavior? The above problems are of great research value.Starting from the relevant concepts of Managerial Overconfidence, this paper reviews the related research results and the present situation at home and abroad, and proposes hypotheses on the basis of theoretical analysis. This paper selects 2011—2013 A-share listed companies in Shanghai and Shenzhen stock markets as samples, uses the combination of theory and empirical research method to discuss the factors that restrain Managerial Overconfidence. In addition, this paper further tests the restrain factors whether to play a role in the enterprise M&A behavior.The first part of this paper introduces the research background, significance and the innovation, and reviews the domestic and foreign related research results and the present situation; The second part reviews the Managerial Overconfidence theory, M&A Motivation theory and Upper Echelons theory; The third part is the research design, including the research hypotheses, data source and select principle, build model and variable definitions; The fourth part includes the empirical test and the result analysis. Results of this study indicate that the board size, the independent directors ratio, chairman and general manager for one person, the women managers ratio, the education of management five factors can restrain Managerial Overconfidence. In addition, this paper also proves that Managerial Overconfidence and M&A decision-making have a positive correlation. And this positive correlation will be reduced when the board size bigger, high ratios of the independent directors and women managers and higher education of management. That is to say, these factors can restrain enterprise M&A behavior caused by Managerial Overconfidence. The results suggest that, in order to make the enterprise M&A and other behavior more rational and scientific, enterprise in selecting managers can consider joining effectively restrain Managerial Overconfidence factors, to make business decisions more reasonable, promote the long-term beneficial development of the enterprise.