The Impact Of Executive Risk Appetite On Corporate Mergers And Acquisitions

Under the guidance of the behavioral economics theory,the behavior of enterprise executives' incomplete rational behavior or risk preference behavior has been paid more and more attention by many scholars,and the economic consequences of their behavior are also being studied in depth.Through theoretical analysis and data modeling,this paper establishes the risk preference model of enterprise executives,and studies the relationship between senior executives risk preference and M&A from the perspective of risk preference.Furthermore,from the perspective of enterprise life cycle,this paper analyzes the influence of the personal trait of senior executives' risk preference on M&A behavior and M&A performance in different stages of enterprise development.Based on behavioral economics theory,enterprise life cycle theory and high-level echelon theory,this paper studies the M&A samples of Chinese A-share non-financial listed companies from 2007-2016.This paper explores the influence of senior executives' risk preference on M&A behavior and M&A performance.Based on the theory of enterprise life cycle and the dynamic perspective of enterprise life cycle,this paper makes an in-depth analysis of the relationship between the two.The study found that:from the static point of view,the more risk preference executives are risk preference managers,the more inclined to implement M&A activities among enterprises,but risk preference executives will reduce M&A frequency and M&A scale;Preference has a positive correlation with M&A performance,that is,senior executives who prefer risk can bring better M&A performance;from the dynamic perspective,senior executives risk preference and M&A performance have a positive correlation.With the development of enterprise life cycle,the negative effect of senior executives' risk preference on M&A is changed from negative to positive,the negative effect on M&A scale is gradually weakened,and the negative effect on M&A frequency is only significantly negative in mature stage.At the same time,with the development of enterprise life cycle,the positive effect of senior executives' risk preference on M&A performance is gradually enhanced.This paper uses literature research,theoretical analysis and regression analysis to explore the relationship between senior executives' risk preference and M&A behavior and M&A performance from static and dynamic perspectives.The purpose of this paper is to reveal the influence of risk preference on M&A behavior.It is proved that the behavioral economics theory and the enterprise life cycle theory can be used as a powerful supplement to the high-level echelon theory to explain the executive behavior.