Management Overconfidence,Director Connection And Corporate M & A Performance

Mergers and acquisitions are one of the important ways for enterprises to improve their competitiveness.But whether M & A really creates value for enterprises has been disputed by scholars at home and abroad.Behavioral finance believes that people are "irrational",that people’s decision-making behavior is easily influenced by subjective factors,and that overconfidence is a common psychological state of people,so overconfidence will affect people’s decision-making behavior.Therefore,this article starts from the manager’s irrational behavior and explores the impact of manager’s overconfidence on the performance of corporate M & A.In the internal governance of the company,the board of directors not only plays the role of supervision and management,but also has the right to plan the company’s future development strategy,so the board of directors will also affect the company’s merger and acquisition decisions.At the same time,due to the formation of the inter-company director relationship network,the joint directors carry out information transmission between companies,which can alleviate the problem of information asymmetry between companies;therefore,the joint directors play an important role in the company’s M & A decision.Therefore,this article further explores the moderating effect of director linkage on the relationship between management overconfidence and corporate M & A performance.First,based on domestic and foreign literature,this article describes the concepts of M & A,M & A performance,managers ’overconfidence,and director ’s association;then,the measurement methods and influencing factors of M & A performance,the internal relationship between overconfidence and M & A performance,and the adjustment of director ’s association Summarize and summarize the research conclusions in terms of function and other aspects.After that,it introduces the principal-agent theory,overconfidence theory and information asymmetry theory in economics,and then analyzes the problems raised in the previous article based on the three major theories,and then proposes three research hypotheses in this paper.Then,according to the research purpose of this article,screen the M & A transactions during the research period,perform regression analysis on the obtained research samples,and conduct robustness test;finally,draw the conclusion of the research.The research sample in this article is the merger and acquisition restructuring between listed companies in China from 2000 to 2018.Select the total asset return rate one year after the merger to measure the M & A performance,and select the two major indicators of the change in total asset return rate and earnings per share in the two years before and after the merger to measure the merger performance;select the company The number of mergers and acquisitions and the remuneration ratio of the top three executives measure management’s overconfidence behavior;subdivide the director linkage into first-and second-order director linkages,and study the moderating effects of the three on the relationship between the two.After empirical analysis,the following conclusions are drawn:(1)Overconfidence of management will have a significant negative effect on the company’s M & A performance;(2)The first-level director connection will aggravate the negative correlation between management’s overconfidence and M & A performance;the second-level director connection can significantly inhibit the negative impact of managerial overconfidence on the company’s M & A performance;due to the first-and secondlevel directors There are diametrically opposite adjustments to the connections,and they affect each other,thus making the overall directors’ connection adjustment effect insignificant.(3)Compared with the merger and acquisition parties belong to different industries,when the merger and acquisition parties belong to the same industry,the negative adjustment effect of the first-order director connection on the relationship between the two is more significant;compared to the merger and acquisition parties belong to the same industry,when the merger parties belong to different In the industry,the positive adjustment effect of the second-order director connection on the relationship between the two is more significant.The main values of the research made in this article are:(1)From the perspective of social relations network,it analyzes the role played by the phenomenon of directors’ connection in the internal governance of the company,which is in line with the development trend of the increasingly tight relationship networks among listed companies;(2)Pioneering Incorporate director linkage into the model of management overconfidence and corporate merger performance research,and use the product of director linkage and management overconfidence to test the moderating effect of director linkage on the relationship between the two;The improvement of the company’s internal governance system has implications.The empirical research in this paper verifies the applicability of behavioral finance theory in corporate decision-making;it expands the influence path of social relationship networks on corporate M & A performance;therefore,it provides new ideas for improving corporate decision-making behavior and corporate governance system.Help to accelerate the development of China’s capital market and China’s economy.