The Impact Of Executive Risk Preference On Corporate M&A Decisions And M&A Performance

With the deepening of globalization,enterprises are facing an increasingly challenging and complex living environment.In the process of daily business decision-making,enterprise managers are inevitably affected by their own psychological factors and various uncertain factors,which will have an impact on M&A decisions and M&A performance.Therefore,studying the influence mechanism of executive risk appetite on M&A performance is exactly important to teach Chinese enterprises how to make correct decisions in M&A activities,improve their M&A performance and inspire them to avoid or reduce irrational behaviors.In this paper,companies listed on the Chinese stock market,which have completed mergers and acquisitions from 2007 to 2014,are selected as the research sample.It explores the impact of executive risk appetite on M&A decisions and M&A performance,and probes into the mediating role of executive confidence and corporate R&D investment between executive risk appetite and corporate M&A performance.Furthermore,the impact of heterogeneous corporate characteristics is analyzed to figure out whether the property rights and certification of high-tech enterprise can affect the influence of executive risk appetite on corporate M&A performance.Relevant research conclusions of this paper are as follows:(1)In terms of the influence of executive risk appetite on M&A decision,higher executive risk appetite makes it more likely to choose cash as the payment method of M&A and simultaneously executives are more willing to choose diversified M&A.Executive risk preference does not have statisfically significant impact on premium of M&A.(2)There is a significant positive correlation between executive risk appetite and corporate M&A performance.Both of executives' overconfidence and corporate R&D investment played significant mediating roles.(3)Considering the influence of heterogeneous enterprise characteristics(the nature of property rights and whether it is a high-tech enterprise),the degree of influence of executive risk appetite on corporate M&A performance is different.Further analysis shows that compared with state-owned enterprises,the impact of executive risk appetite on corporate M&A performance is more significant in non-state-owned enterprise.Compared with non-high-tech enterprises,the influence of senior executives' risk appetite on M&A performance is more significant in high-tech enterprises.Compared with the existing literatire,this paper takes the executive risk appetite as the starting point and expands the research on the influence of executive risk appetite on M&A performance.By analyzing the two mediating effects of executive overconfidence and corporate R&D investment,the comprehension about the influence mechanisru of executive risk appetite on M&A performance is deepened.Meanwhile,it is beneficial to assess the economic effects of corporate executive risk appetite.It is of great practical significance to take the heterogeneous enterprise characteristics into consideration and enhance our comprehension about enterprise's M&A behaviors.