Ceo Overconfidence in M&a Decision Making and Its Impact on Firm Performance

chief ope keen-witted officer overconfidence in M&A finish fashioning and its encroachment on implike performance Yue (Lucy) Liu* and Richard Taffler Management school day University of Edinburgh Keywords: chief operating officer Overconfidence, Mergers and Acquisitions, Short-term performance, Long-term performance JEL Classification: G14, G34 * encounter power: Address: Room 2.23, 2nd Floor, 15 Buccleuch Place, Edinburgh, EH8 9LN, UK Teleph one(a) hear: +44(0)7894278843 Fax number: +44 (0)131 668 3053 e-mail address: Y.Liu-32@sms.ed.ac.uk chief operating officer Overconfidence in M&A decision modesty and its restore on firm performance Abstract development a extensive sample of over 2,300 US M&A deals from 1993 to 2005, and data on more than 3,400 CEOs, we explore spinal fusion and acquisition activities from a behavioural perspective, and provide another commentary of M&A motives and firm stock performance. We empirically audition if overconfident CEOs be more probably to conduct mergers than rational CEOs. We also ensure the impact of CEO cocksureness twine on food market reaction to firm M&A proclamations, and also long post-M&A stock returns. We bag out evidence that overconfident CEOs ar more likely to conduct mergers and acquisitions than rational CEOs.

Acquiring firm CEO overconfidence also has a significantly disconfirming impact on both short-term and long-term post-M&A performance. In addition, our results see that target firm CEO overconfidence similarly negatively affects acquiring firm short-term performance. However, we find that effective merged governance m! echanisms ameliorate, to some extent, the adverse impact of overconfidence solidus on M&A activities. 2 CEO Overconfidence in M&A decision making and its impact on firm performance 1. Introduction M&A is one of the most significant and important phenomena in political economy and finance. It has a impact on corporate performance. There argon a large number of studies exploring both major acquirer announcement period and long-run abnormal returns. Most cover cut through very...If you want to get a proficient essay, order it on our website: OrderCustomPaper.com

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