Research On The Influence Of Managers' Overconfidence In Corporate Serial M&A

In recent years, the serial M&A happend frenquently, but most of them areharmful. Overconfidence can be an effective factor to explain this phenomenon,especially in the background of china's culture. Mangers's overconfidence will easilylead to M&A, but the mechanism of which remains to be explored. Managers can getknowledge frome the provious company performance feedback, and revise theirbehavior and overconfidence, so the learning behavior can partially explain the reasonof the high frequency of M&A of the overconfident managers. In addition, the percentof independent directors can influence the managers' learning behavior.This paper examines the effect between managers' overconfidence and serialM&A taking314Chinese listed companies which have done serial M&A from2005to2012.The results are as follows: Managers' overconfidence is significantlypositively correlated with serial M&A. The managers' learning behavior issignificantly negatively correlated with serial M&A. Managers' overconfidence issignificantly negatively correlated with learning behavior. Managers' learningbehavior is a mediator variable between mangers' overconfidence and corporate serialM&A, and can partially explain the reason of the high frequency of M&A of theoverconfident managers. The percentage of independent directors can moderate therelationship between mangers' overconfidence and learning behaviors. The first-stagemoderated mediation model had been refused.This paper examines the relationship between managers' overconfidence andserial M&A, enriches the study of overconfidence hypothesis, introduced managers'learning behavior and the percent of independent director to do a further research, andgot some meaningful conclusions. This article would provide the beneficial referencefor the research of overconfidence hyopthesis.