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Executive Overconfidence and Performance of Corporate Cross-border Mergers and Acquisitions

  • Haiyue Liu
  • Dongmei He
  • Jie Duan
  • Yile WangEmail author
Conference paper
  • 8 Downloads
Part of the Advances in Intelligent Systems and Computing book series (AISC, volume 1191)

Abstract

With the implementation of “Belt and Road Initiative”, Chinese companies have accelerated their pace of internationalization, for which cross-border merger and acquisition (M&A) activity has become a major strategic tool. This paper investigated the impacts of executive overconfidence on cross-border M&A performance by taking a sample of 424 cross-border M&A cases launched by China’s Shanghai and Shenzhen A-share listed companies from 2008 to 2017. OLS regression results showed that executive overconfidence undermined both short-term and long-term cross-border M&A performance, especially when the acquiring company was not state-owned and when the target was located in a developed or non-BRI country. Executive overseas background was found to play a positive moderating role in the correlation between executive overconfidence and short-term cross-border M&A performance. This study provided some practical implications on corporate governance and talents hiring policies, especially for companies that are enthusiastic about cross-border mergers and acquisitions.

Keywords

Executive overconfidence Cross-border M&A Performance 

Notes

Acknowledgements

This work was supported by The National Social Science Fund of China, a Study on the Formation Mechanism and Nurturing Policies of China’s Cross-border Industrial Clusters Under “Belt and Road Initiative” (19BJY100).

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© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021

Authors and Affiliations

  1. 1.Business School of Sichuan UniversityChengduPeople’s Republic of China

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