| With the emergence of many abnormal phenomena in the capital market,the traditional "rational economic man" hypothesis has been unable to make a reasonable explanation.For this reason,scholars bring the psychological state of managers into the scope of research while broadening the assumptions of rational economic man.Practice shows that business managers often show different psychological states when making major decisions: overconfidence,anchoring effect,herd behavior and frame dependence effect,among which overconfidence is more dominant and normalized.Therefore,the academic community is paying more and more attention to the study of the trait phenomenon of managers’ overconfidence.Under the impetus of domestic economic policy reform,corporate mergers and acquisitions(M&A)have gradually become an important way for enterprises to seek development.Although the scale of M&A transactions has been greatly improved in the past ten years,there are many problems of excessive premium payment in merger and acquisition transactions.Excessive M&A premium will make enterprises face inefficiency in M&A transactions.However,managers are still willing to pay high M&A premium in the transactions.Managers’ personal perceptions and traits will also affect the success of M&A transactions.Overconfident managers will easily overestimate economic benefits and personal management capabilities,which will lead to M&A decision-making errors.In addition,the external environment,such as the degree of economic prosperity,will also affect the relationship between managers’ overconfidence and M&A premium.Therefore,the role of the manager’s overconfidence in the M&A premium has great significance for theoretical research and practical practice.This paper will also study the relationship between financing constraints,overconfidence and M&A premium based on financing constraints.This paper studies the current situation of managers’ overconfidence,M&A premium and financing constraints in existing literature.Taking the M&A data from2008 to 2017 as samples,based on the behavioral finance theory and high-level echelon theory,this paper analyses the influence of managers’ overconfidence onM&A premium payment,and at the same time,it analyses the adjustment of financing constraints from the perspective of free cash flow hypothesis and financing constraints,and then proposes two hypotheses.Based on theoretical analysis and empirical tests,the following conclusions are obtained: managers’ overconfidence has a significant positive relationship with the M&A premium,and it is more pronounced during the economic boom period.In the relationship between managers’ overconfidence and M&A premium,financing constraints have a negative regulating effect.The size of financing constraints can alleviate the degree of managers’ overconfidence,which can reduce their irrational premium in M&A activities.At the same time,financing constraints also restrict managers’ right to use the funds of shareholders and creditors.Through the supervision of the manager,control their free use of funds,thus restraining the occurrence of M&A premium.Finally,some suggestions are put forward according to the conclusions of the study. |
