Analysis Of The Transmission Path Of Managerial Overconfidence On The Impact Of Mergers And Acquisitions

With the globalisation of the economy and the further development of China’s market economy,domestic companies are under increased competitive pressure and more and more companies are expanding and looking for new business growth through mergers and acquisitions.However,in recent years,there have been many cases of failed mergers and acquisitions(M&A),and the personality traits of managers have become an important factor in many M&A cases.Based on behavioural finance,top echelon theory and principal-agent theory,this paper uses a combination of rooted theory and case studies to investigate how managerial overconfidence affects the transmission path of M&A.Through coding and analysing the case data of HNA and Lenovo,this paper has three main findings: firstly,the behavioural characteristics of managerial overconfidence in M&A are summarised,and it is found that the more the characteristics are,the deeper the degree of managerial confidence is;secondly,there are four different paths through which overconfident managers act on M&A,namely: strategic orientation,organisational restructuring,control mechanism and culture building.Third,managerial overconfidence has a dual impact on corporate M&A behaviour and M&A performance.By discussing the mechanisms of how the psychological trait of managerial overconfidence affects mergers and acquisitions,this paper provides new ideas for research on the proposition that managerial overconfidence affects mergers and acquisitions,and provides empirical evidence for firms to restrain ineffective merger and acquisition behaviour and internal governance brought about by managerial overconfidence.