CEO Financial Background?M&A Type And M&A Performance

Merger and acquisition is a kind of external growth mode which gains control over other enterprises through transaction of property rights,and expands the scale and promotes the core competence under the condition of market economy.Although Mergers and acquisitions start late in China,the development trend is very strong.In 2013,the amount of mergers and acquisitions in listed companies was 889.2 billion yuan,increased to 2.39 trillion yuan in 2016,with an average annual growth rate of 41.14%,ranking second in the world.M&A has become an important way for capital market to support the real economy.Literature review of domestic and foreign literature,at present,the research on the relationship between TMT background characteristics and M&A is mainly divided into three directions:managerial overconfidence and corporate mergers and acquisitions;the relationship between TMT background and corporate M&A;TMT heterogeneity and the relationship between corporate mergers and acquisitions.The above research questions are based on the theory of“Upper echelons theory”proposed by Hambrick and Mason(1984).It is believed that in the process of corporate governance,the background characteristics of TMT include education,tenure,age,gender,professional experience and so on,which have a great influence on business decision making.However,there are few researches on CEO financial background and M&A.This paper focuses on the CEO of the executive team who plays an important role in M&A decision-making,and studies the characteristics of CEO financial background and its influence on M&A decision,M&A type and M&A performance.We selected all the listed companies in Shanghai and Shenzhen as a general sample between 2011 and 2013,manually collected and compiled the CEO's financial background information,and three years of mergers and acquisitions occurred.We analyzed the influence of CEO financial background on M&A decision by Logistic regression,and then screen out all the mergers and acquisitions of enterprises,manually collect their M&A announcement to determine the type of mergers and acquisitions.We use all these information to study the impact of CEO financial background on the type of mergers and acquisitions performance impact.Through empirical analysis,the paper finds that CEO enterprises with financial background are more likely to seek further development through mergers and acquisitions,and the choice of M&A type are more inclined related acquisitions which has small risk and create better performance.CEO's financial background also has a positive impact on the long-term M&A performance of enterprises,increasing the overall value of enterprises and promoting the long-term and stable development of enterprises.