CEO Financial Background And M&A

At present,China is accelerating into the leading economic era,and the industrial transformation is accompanied by a new wave of mergers and acquisitions.Enterprises can’t ignore the role of M&A strategy if they want to realize capital expansion.With the implementation of the "Belt and Road" Initiative proposed by General Secretary Xi Jinping and the further relaxation of M&A policies,more and more listed companies have adopted M&A in order to be able to merge into the track of global industry competition and realize the layout of the global industry chain.The"Upper Echelon Theory" proposed by Hambrick and Mason(1984)believes that in the senior leadership team of the company,the managers’ personal physiological characteristics and past experience will affect their ability to identify and judge things and their values,and their capabilities and values will motivate them to make highly personalized decisions.Senior managers determine the strategic decisions of the company,and the CEO is one of the most important members of the company’s senior managers.However,few scholars in the existing literature have analyzed from the perspective of CEO background characteristics.Therefore,this article attempts to study the influence of CEO financial background on M&A decisions and M&A performance.This paper uses the financial data of the three years before and after the acquisition of listed companies when researching the performance of mergers and acquisitions.Because there are many missing data in 2008 when examining the performance of companies before mergers and acquisitions,only the data of each company in 2009 is used.The financial data of listed companies for 2009-2018 is taken.All A-share listed companies in Shanghai and Shenzhen in 2012-2015 are taken as the overall sample.This article analyzes the impact of CEO financial background on M&A decisions through Logistic regression.Subsequently,we used a multiple linear regression model to analyze the impact of CEO financial background on corporate performance and the path of influence on M&A performance.After empirical testing,this article draws the following conclusions:Firstly,compared to companies with a CEO who does not have a financial background,companies with a CEO who has a financial background are more likely to initiate mergers and acquisitions.Secondly,among companies that have mergers and acquisitions,compared to no CEOs with a financial background and CEOs with a financial background can significantly improve the M&A performance of the company.Thirdly,the impact of the CEO’s financial background on M&A performance is achieved through two ways:value creation and value capture.The possible innovations of this article are as follows:Firstly,this article starts from the perspective of the CEO’s financial background,studies its impact on M&A decisions,provides a relatively specific perspective,and then more fully understands the effect of companies introducing financial background executives Secondly,this article discusses the impact of CEO financial background on M&A performance and the ways to influence it,which helps to understand the impact of executive financial background on corporate M&A performance,and enriches existing literature on corporate M&A performance research from the side.