Research On The Influence Of Overconfidence On The Performance Of Cross-Border M&A From The Perspective Of Executive' Backgrounds

In recent years,with the economic globalization and the rapid development of the economy and society,the frequency and scale of overseas M&A of Chinese corporates have gradually increased.At the same time,the deficit of mergers and acquisitions on long-term performance shows signs of opposite decline.Based on the limited rationality of managers,this research studies the influence of overconfidence of listed company executives on the performance of cross-border M&A based on behavioral finance.This research selects 306 overseas M&A events in Shanghai and Shenzhen Stock Exchanges from 2008 to 2016 as a research sample.Based on the comprehensive analysis of the relationship between executive backgrounds,managerial optimism and corporates' overseas M&A performance,this research proposes corresponding research hypotheses around the three relationships.Considering the particularity of the Chinese market,data availability,reliability and stability,the change value of ROA in the year before and after M&A is selected as the explanatory variable,and the difference in the profit forecast of the enterprise is used as the explanatory variable.And on this basis,this research builds a research model according to research hypothesis.Through the descriptive analysis,multi-collinearity test,regression analysis and other steps to test the relationship between managerial optimism and performance of overseas M&A.This research innovatively introduces the backgrounds characteristics of the senior management team,and refines the executive backgrounds into an overseas backgrounds and social backgrounds to study the regulatory effect of executives' overseas backgrounds and social backgrounds experience on the overconfidence in cross-border M&A.Finally,this research uses the method of replacing the explanatory variables to test the robustness of the overall model to insure the reliability of the research.Through empirical analysis,this study finds that the overconfidence of corporate executives has a significant negative impact on cross-border M&A performance,but executives' overseas backgrounds and social backgrounds experience can significantly reduce this impact.On this basis,it is recommended that the company attach importance to the phenomenon of overconfidence in the decision-making process of executives.By planning the corporate governance structure and rationally configuring the composition of the senior management team,hope that the negative impact of executives' overconfidence can be suppressed.