| Acquisition is an important way for enterprise's capital expansion.Some exist studies have found that most acquisition actives would not increase the income of the shareholders no matter from the long or short term.So here comes the question,why M&A would not increase the income of the shareholders during the way of the enterprise's expansion?In order to explain it,scholars have done some researches from the efficiency and effect of acquisition two aspects,they found that acquisition premium is widespread exist in acquisition,and it will affect the efficiency and effect of acquisition.But in most cases,premiums paid is invalid,high premiums sometimes may lead the acquisition go to failure or even bankruptcy.For now,under the stimulation of a series reform policy,acquisition market will come to be more prosperous,therefore,find the key factors that may influence the efficiency and effectiveness of acquisition seems necessary.CEO plays an important role in the enterprise.The character of CEOs and their power will influence the efficiency and effect of enterprise's operation.Overconfident CEOs usually optimistic forecasts the result of investment,that will make the enterprise undertake more risks.CEO use their power as a tool to ensure the activities work according to their own intention.The exercise of power on the one hand,can reduce the resistance in the organization running,but one the other hand,may cause principal-agent relations between CEO and shareholders.Power can also be a useful tool for CEO to gain private benefits.Managers' power can be classified into occupational power and personal power.During acquisition activities,overconfident CEO in different cases will cause different influences on acquisition premiums.This paper mainly studies the effect of CEO overconfidence on acquisition premiums in acquirer' perspective,and according to the different source of power,respectively studied the effect of CEO occupational power and personal power influence the relationship between CEO overconfidence and acquisition premiums.This paper contains six sections:The first part is introduction,which introduced the background and significance of this paper,defined the main concepts involved,and introduced the innovation.The second part is the literature review.The theoretical basis and review of the literature is mainly focused on the acquisition premium,CEO overconfidence and CEO power.The third part is the theoretical analysis and assumptions.Based on the summary of relevant theories,put forward research assumptions.The fourth part is the empirical research design.According to the hypothesis,selected the variables of the study,built statistical models.The fifth part is the empirical analysis.First,through empirical study to explore the relationship between CEO overconfidence and acquisition premiums.Secondly,based on different sources of CEO power,according to the different source of power,respectively studied the effect of CEO occupational power and personal power influence the relationship between CEO overconfidence and acquisition premiums.The sixth part is the summary and recommendations.Summarize the empirical results and put forward the relevant countermeasures and suggestions,and in the end of this paper pointed out the shortcomings.The empirical results show that,in Chinese listed Corporation the phenomenon of CEO overconfidence is very common and serious.CEO overconfidence leads to higher premiums.CEO with greater personal power will intensify the relationship between overconfidence and acquisition premiums,leading to a higher premiums level.CEO occupational power will not affect the relationship between overconfidence and premiums.Main innovations of this paper include:firstly,from the CEO characteristics'perspective,studied the relationship between CEO overconfidence and acquisition premiums.Secondly,according to the different source of power,respectively studied the effect of CEO occupational power and personal power influence the relationship between CEO overconfidence and acquisition premiums. |
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