Research On The Influence Of Managerial Power And Ability On The Corporate Cross-border M&A Performance

In recent years,driven by the environment at home and abroad,the upsurge of cross-border mergers and acquisitions in China has continued to hit.More and more companies has turned their attention to the international arena to carry out cross-border M&A activities.It has become a way for Chinese enterprises to get rid of backward production capacity,achieve industry transformation and upgrade,expand the production scale and go to the world market.However,the reality shows that the performance of enterprises after cross-border mergers has not been significantly improved as expected,and some mergers and acquisitions have even brought huge losses to enterprises.But with the deepening of relevant research,more and more scholars began to focus on the management factors of enterprises on the basis the high-level echelon theory of Hambrick and Manson(1984).By analyzing the manager’s motivation and behavior,its impact on the performance of cross-border M&A will be discussed.The core idea of this paper is that the corporate executive under different characteristics have different decision-making motives,then different strategic behaviors will be implemented in cross-border M&A activities.In the end,the performance after mergers and acquisitions will produce different effects.The focus of this paper is to study the power and ability characteristics of management.The paper firstly reviews the relevant theories and viewpoints of domestic and foreign scholars on management characteristics and cross-border M&A performance,and then some possible assumptions are put forward.Then,it selects totally 208 Chinese listed companies with cross-border M&A events from 2012 to 2016 as the research objects.After that,it discusses the influence of the managerial power and ability characteristics and their interaction effects on the cross-border M&A performance of enterprises.The Tobin Q value of the enterprise after one year of the merger and acquisition event is chosen to replace the dependent variable performance.In the measurement of the independent variable,the principal component analysis method is used to construct the relevant managerial power characteristics.The comprehensive indicator uses the DEA-Tobit second-order model to measure the managerial ability characteristics of the enterprise.Finally,here comes to the the corresponding conclusions through the empirical research:(1)The characteristics of managerial power and the performance of cross-border M&A of enterprises are significantly negative;(2)The characteristics of managerial ability and the performance of cross-border M&A of enterprises are significantly positive;(3)The interaction between managerial power and ability characteristics hasa significant positive relationship with corporate cross-border M&A performance.According to the above conclusions,some specific policy recommendations for improving corporate governance structure and the performance of cross-border M&A are proposed.In terms of the managerial power,it is essential to effectively supervise and restrict management power by uniting internal and external forces.As for the managerial power,companies are supposed to reinforce the senior management team building and improve the overall level of competence of corporate management.