How Acquisition Premium Influence Post-acquisition Performance Of Chinese Overseas M&A

Since China's accession to WTO,the economy has been growing rapidly,and the internationalization process of domestic enterprises has been accelerating.The net foreign investment is also increasing year by year.As a main way of Chinese enterprises' outward FDI,the amount of M&A increase year by year.As the largest developing country,the premium rate of Chinese M&A is high while the performance is not good.Previous studies have mainly studied M&A premium or M&A performance.There is little research on whether the high premium paid by Chinese enterprises in cross-border M&A is the reason for the terrible performance.Based on previous studies,this paper mainly extends from the following aspects:first,we link the literature of post-acquisition performance and acquisiton premium before and discuss the impact of acquisition premium on post-acquisition performance.Second,the framework of behavioral economics is introduced,which validates the mediating role and moderating role of investor sentiment and managerial overconfidence in the relationship between acquisition premium and post-acquisition performance.Based on the 2007-2017 years' implementation of acquisition of Chinese listed companies as the research object,according to a series of sample screening conditions,finally get 118 exit M&A events.Based on the merger announcement date four weeks before the share price to calculate premium,measured in CAR short term post-acquisition performance,the variation of BHAR and ROA to measure the long term post-acquisition performance.A multiple linear regression model is used to study the impact of acquisition premium on long and short term post-acquisition performance,and the impact of investor sentiment and managerial overconfidence on these relationships.The main conclusions are as follows:the acquisition premium will positively affect the short-term post-acquisition performance and the long-term post-acquisition performance.Further,the merger premium effect on short term post-acquisition performance in investor sentiment has a mediating effect;acquisition premium effect on long-term post-acquisition performance managerial overconfidence moderating effect,overconfident managers will weaken the premium positive impact on the long-term performance.The robustness test of this paper provides an effective support for the conclusion of the study.Finally,based on the research results,this paper puts forward relevant suggestions from the enterprise level,and thinks about the future research direction according to the shortcomings of this study.