Analysis Of The Influence Of Management Overconfidence On The Negative Duration Of M&A Performance

With the development of the economy and the strengthening of the enterprise,the traditional capital accumulation process can no longer meet the needs of enterprise expansion.Therefore,most enterprises choose M&A as a means of enterprise expansion.However,some studies have shown that M&A can not create value for the enterprise or bring about an increase in value.On the contrary,it may bring negative mergers and acquisitions performance.How long does the negative duration of the company's performance after M&A?What are the factors affected?There have been few special studies on this issue in the literature,but the solution to this problem has certain significance for M&A.The study of traditional economics is based on the assumption of"rational economic man" to study the influencing factors of M&A performance,but ignores the influence of management's personal characteristics on M&A.As the company's strategy makers and key decision makers,management has a significant impact on the development of the company.If management is moderately confident,it can indeed have a good impact on corporate decision-making and operations.However,if management is overconfident,it may damage the company's value in the specific business process.So this paper breaks the assumption of "rational economic man" and explains the reasons for the negative M&A performance based on management over-confidence from the perspective of behavioral finance.This paper firstly selects China's A-share listed companies from 2008 to 2016 as the research object,uses the event research method to solve the M&A performance,and uses the multivariate mixed regression model to study the influence of management overconfidence on M&A performance.Secondly,using FF three-factor model to solve long-term M&A performance,based on the significant negative long-term M&A performance,the number of months in which the M&A performance continued to be negative in the second month after M&A,using the KM product limit method and the time-dependent covariate Cox model to study the management over-confidence M&A performance has an impact on negative duration.The empirical results of this paper show that,firstly,management overconfidence is negatively correlated with M&A performance,that is,the more overconfident the management,the worse the M&A performance.Secondly,in the short-term,M&A performance,although there will be a value effect,in the long run,M&A performance is significantly less than or equal to zero.Thirdly,the negative performance of companies entering the observation period lasted 10.67 months.Most of the companies with negative M&A performance continued to have a negative M&A performance of 10.67 months after entering the observation period.The empirical finding that management overconfidence is positively related to the negative duration of M&A performance,that is,the more overconfident the management,the longer the negative trend of M&A performance.The possible contributions of this paper are mainly reflected in the following:firstly,this paper introduces the negative duration of M&A performance,which provides a new idea for the study of M&A performance,in terms of research perspective.Secondly,in terms of research methods,this paper uses survival analysis to study the impact of management overconfidence on the negative duration of M&A performance.