Female Executives And M&A Goodwill

With the increasing participation of female executives in corporate governance and management activities,whether it affects corporate decision-making and its mechanism has become the focus of theoretical and practical circles.Merger and acquisition(M&A),as an important way of enterprise extension growth,has developed rapidly in China's capital market in recent years.However,due to the complexity,high uncertainty and strong subjectivity of M&A,the expected synergy effect cannot be realized and the enterprise value can be improved.On the contrary,the huge goodwill generated by high premium may damage the enterprise value and become a "winner curse".With the rise of M&A activities in China's Growth Enterprise Market,the goodwill of M&A has been increasing and the proportion of its net assets has also been increasing.The impact of the hidden risks on the enterprise itself and even the entire capital market has received increasing attention.Although a great deal of achievements have been made in the research on the impact of female executives on corporate decision-making,the literature on female executives and goodwill in mergers and acquisitions is relatively scarce.Based on the decision-making characteristics of female executives,such as lack of overconfidence,risk aversion and high moral standards,it is of theoretical and practical significance to discuss how they affect goodwill in mergers and acquisitions under the background of the rise of "her" power and the sharp rise of goodwill.This paper takes the GEM listed companies in China from 2010 to 2018 as the research sample,and examines the impact of female executives on the goodwill of mergers and acquisitions,as well as its mechanism of action and economic consequences.The study found that the psychological characteristics of female executives,such as risk aversion,lack of overconfidence and high moral standards,will affect their decision-making behavior and further affect the enterprise's merger and acquisition decision-making,and inhibit the fictitious high goodwill of merger and acquisition.The higher the proportion of female executives in the company's management,the more obvious the inhibition effect is.That is,the higher the proportion of female executives,the greater the discourse power,which will have a substantial impact on the enterprise's decision-making,and the more significant the inhibition effect on the goodwill of merger and acquisition.In addition,the restraining effect of female executives on goodwill is regulated by the internal control quality of the enterprise and the degree of marketization in the region where they are located,which is manifested as complementary effect,i.e.in regions with good internal control quality and high degree of marketization,the internal and external governance environment,supervision system,information transparency,checks and balances mechanism,etc.are relatively perfect,which can effectively restrain irrational and self-interested behaviors of executives,reduce merger goodwill,and weaken the restraining effect of female executives;However,in the environment of poor quality of internal control and low degree of marketization,the role of female executives is more significant,and the goodwill of mergers and acquisitions is suppressed to a higher degree,which provides evidence for the complementary effect of executive characteristics and internal and external governance.Further analysis of the mechanism and economic consequences of female executives inhibiting goodwill in mergers and acquisitions shows that the path of female executives inhibiting goodwill is to reduce overconfidence and agency costs.Examining the economic consequences of goodwill in mergers and acquisitions from the perspective of enterprise value,the results show that goodwill in mergers and acquisitions has significantly damaged the value of enterprises,and the damage effect is mainly reflected in companies with a low proportion of female executives,indicating that companies with a high proportion of female executives have a significant inhibitory effect on goodwill,increasing the value of goodwill in mergers and acquisitions and reducing the negative impact of goodwill in mergers and acquisitions on enterprise value.This study enriches the literature on factors affecting goodwill in mergers and acquisitions,and provides evidence that gender of senior executives affects corporate behavior from the perspective of goodwill in mergers and acquisitions.It also enriches the research on economic consequences of corporate governance effects of female senior executives.The research conclusion has enlightenment significance for enterprises to select management and perfect merger and acquisition decisions.