The Research About The Effect Of Managers’ Overconfidence On The M&A Performance Base On Behavioral Corporate Finance

With the rapid development of China’s market economy and capital market continuously improving, the transaction of property rights as the main content of the enterprise merger and acquisition has attracted more and more attention in the society. As the promoters of M & A activity, senior managers play a decisive role in the decision of capital operation. The traditional theory assumes that managers are completely rational, and the capital market is completely efficient. However, the actual situation is often deviate from the theoretical model. Therefore, this paper attempts to start from a new theoretical perspective to study the effect of managers’overconfidence on the M&A performance, which is proved to be a common psychological deviation.In the part of theoretical analysis, the paper summarizes the existing research results and methods at home and abroad, and then puts forward the research hypothesis based on a simplified analysis model. In the part of empirical research, in order to test whether the research hypothesis is in line with the actual situation of China’s capital market, the article obtains 797 samples of China’s listed companies from 2010 to 2013. After dimensionless financial indicators being used to measure the M&A performance and the change of ownership and the times of M&A events being used to measure the degree of manages’overconfidence, the paper utilizes SPSS 20.0 to carry out the descriptive statistical analysis, variance analysis, regression analysis and robustness test, etc.The empirical results show that:(1) In a certain range, the M&A performance will increase as the degree of manages’overconfidence goes up; but once beyond this range, the M&A performance will decrease sharply as the degree of manages’overconfidence goes up. In other words, the effect of manages’overconfidence on the M&A performance is not simply positive or negative:the moderate confidence can help the M&A performance increase, but but too much confidence can lead to performance reduction. (2) The corporate governance of China’s listed companies generally does not inhibit the negative impact of managers’overconfidence. At the same time, the empirical results indicate that the stronger enterprises have the nature of state-owned property, the worse the M&A performance are. It may be that the M&A decisions made by state-owned enterprises are dominated by administration rather than market, and the M&A behaviors are certainly not entirely determined by their senior managers. (3) The greater the enterprise assets, the more benefits to the raise of M&A performance. This is probably because the enterprises who own large amount of assets have strong discourse power and horizontal, vertical, and even cross-border integration ability.The paper also puts forward a number of relevant countermeasures and suggestions, which are able to effectively restrain the adverse influence of managers’ overconfidence on the M&A performance:Improving and perfecting the corporate governance; establishing a scientific and effective decision-making mechanism; reinforcing the personal comprehensive soft power.