An Empirical Study On Relationship Between Managerial Overconfidence And Performance Of Transnational Mergers And Acquisitions Of Chinese Listed Companies

In 2008, the outbreak of global financial crisis led to many countries’ economic recession. Many enterprises were facing bankruptcies. At the same time, Chinese enterprises accelerated the pace of expansion. They carried out many transnational mergers and acquisitions(also called cross-border M&A) on the world economic stage. But when we were delighting the rapid development of our enterprises, we should also calm down and think whether it was overconfidence for the top managers to implement so many transnational M&A activities in the global economic recession and what effects could overconfidence had on performance of transnational M&A.Fortunately, a lot of scholars had made some achievements in the study of the relationship between managerial overconfidence and performance of M&A. But most of them all focused on domestic M&A activities and payed less attention to performance of transnational M&A. Therefore, on the basis of existing theory, this paper researched on the subject of transnational M&A.This paper used 61 enterprises of Chinese listed companies, which carried out transnational M&A activities between 2008 to 2010, as research samples. By using factor analysis methods, this paper set up a comprehensive performance indicator of transnational M&A, After that, this thesis studied the relationship between overconfidence and performance of transnational M&A from descriptive analysis, correlation analysis and partial correlation analysis. This paper included five chapters:First, introduced the research background, research significance, research thoughts and methods; Second, introduced the existing research results and theories; Third, proposed research hypothesis and established a theoretical model; Forth, introduced details about samples and used Mann-Whitney U test and T test to verify hypothesis from descriptive analysis, correlation analysis and partial correlation analysis, as well as summarized the data analysis results and put forward suggestions; Fifth, concluded the research and pointed out the directions of future research. At last, the research results showed that in the year before transnational M&A activities were carried out, managerial overconfidence was significantly and positively correlated with performance. Besides, in the first year after transnational M&A activities, managerial overconfidence was significantly and negatively correlated with performance. Moreover, the relationship between managerial overconfidence and performance was negative in the year when transnational M&A activities were carried out and the second year after M&A, but their significance varied according to the data and methods.The significances of this paper were enriching the overconfidence theories, and exploring the relationship between managerial overconfidence and performance of transnational M&A. What’s more, this paper established a scientific comprehensive performance indicator of transnational M&A from profitability, developing ability, capital operation ability and solvency. Furthermore, this paper gave some effective suggestions to enterprises and top managers, which made a significant sense to economic activities.