Managerial Power,Assessment Agencies Reputation And Valuation Premium

This paper studies the influence of managerial power and assessment agencies reputation on valuation premiums in the M&A market of A-share listed companies.Based on the M&A events of A-share listed companies from 2007 to 2016,this paper quantitatively analyzes the influence of managerial power and assessment agencies reputation on valuation premiums.It is found that in M&A activities,there were a significantly positive correlation between managerial power and valuation premiums had and a significantly negative correlation between assessment agencies reputation and valuation premiums,however,the influence of the interaction term between managerial power and assessment agencies reputation on valuation premiums is not significant.This article analyzes that when the managerial power of listed companies are relatively concentrated,due to the existence of such factors as blind arrogance and self-interest motives,the management will use their power to influence M&A activities,resulting in an increase in the valuation premium of M&A activities;Assessment agencies with good reputation has high cost of violation in M&A activities,and they will independently and impartially evaluate the underlying assets with a more cautious approach.The conclusions of the study indicate that in M&A activities,attention should be paid to the negative impact of managerial power on M&A activities,and hiring of assessment agencies with good reputation should be used to participate in the assessment.Finally,this paper proposes that the subject of transaction in the M&A market should improve the corporate governance,the assessment agency and the appraiser should improve their professional standards on the basis of adhering to the principle of independence,and the regulatory authorities and investors should strengthen supervision in the whole trading process,stopping the malicious transaction in time and promoting the healthy development of M&A market.