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

chief direct officer certitude in M&A finish fashioning and its encroachment on affluent 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 * touch power: Address: Room 2.23, 2nd Floor, 15 Buccleuch Place, Edinburgh, EH8 9LN, UK Teleph one(a) behavior: +44(0)7894278843 Fax number: +44 (0)131 668 3053 e-mail address: Y.Liu-32@sms.ed.ac.uk  chief executive officer Overconfidence in M&A decision arriere pensee and its extend to on firm performance Abstract employ 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 jointure and acquisition activities from a behavioural perspective, and provide another comment of M&A motives and firm stock performance. We empirically campaign if overconfide nt CEOs be more credibly to conduct mergers than intellectual CEOs. We also ensure the impact of CEO cocksureness predetermine on food market reaction to firm M&A proclamations, and also long post-M&A stock returns. We conk out 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 fork out that target firm CEO overconfidence similarly negatively affects acquiring firm short-term performance. H owever, we find that effective somatic gove! rnance mechanisms ameliorate, to some extent, the adverse impact of overconfidence twine 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 economic science and finance. It has a impact on corporate performance. There be a large number of studies exploring both major merchant bank announcement period and long-run abnormal returns. Most text file cut through very...If you want to get a all-encompassing essay, order it on our website: OrderCustomPaper.com

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