The Impact Of Executives' Overseas Background On Cross-border Mergers And Acquisitions Of Chinese Listed Companies

Investment has various forms and cross-border mergers and acquisitions(M&A)is one of the most important forms of foreign direct investment.In recent years,enterprises in China have exploited the international market and obtained rich overseas resources,advanced foreign production technology and management experience through cross-border M&A.While"going out",Chinese companies have attracted a large number of returnees from overseas.Returnees entering the top of the company have brought advanced management experience to the company and have had a profound impact on the strategic planning and decision of the company.Under the circumstances,questions like what impact the overseas backgrounds of corporate executives will have on the cross-border M&A decisions of enterprises,and whether they can improve the performance of cross-border M&A remain unanswered.In the context of the massive cross-border M&A and huge amounts of return of Chinese returnees,exploring these issues has important practical guiding significance for the internationalization process of Chinese enterprises.Based on the upper echelons theory and the theory of information asymmetry,this paper uses the data of cross-border M&A transactions of listed companies from 2008 to 2016,using methods such as event study analysis,financial index method,propensity scores matching method and multivariate regression analysis to study the impact of overseas backgrounds of corporate executives on corporate cross-border M&A behavior.The research results show that:(1)When executives of the companies have overseas backgrounds,the companies are more likely to choose cross-border M&A.(2)In the case of cross-border M&A,the overseas backgrounds of executives can help companies reduce information asymmetry and lessen the M&A premium,thereby improving the short-term performance of cross-border M&A.The impact of executives'overseas backgrounds on short-term performance of cross-border M&A is mainly due to the overseas work experience of executives.According to the identity,the influence is mainly from the overseas backgrounds of executives except CEOs and chairmen.(3)In the long run,companies with returnee CEOs or chairmen can better manage their organizations and integrate resources in the later stages of cross-border M&A to achieve higher long-term performance.After drawing the conclusions above,this paper examines the impact of the proportion of returnees on the strategic choice and the short-term performance of outbound mergers and acquisitions.It is found that the higher the proportion of returnees(especially the proportion of executives with overseas work experience)is,the more likely a company is to choose to go abroad for mergers and acquisitions,and to achieve higher outbound M&A short-term performance.Eventually,this paper makes relevant recommendations from the government and enterprise levels on the basis of theoretical and empirical analysis,in order to provide useful practical enlightenment for Chinese enterprises to make cross-border M&A decisions.