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

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Proceedings of the Fourteenth International Conference on Management Science and Engineering Management (ICMSEM 2020)

Part of the book series: Advances in Intelligent Systems and Computing ((AISC,volume 1191))

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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.

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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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Authors and Affiliations

  1. Business School of Sichuan University, Chengdu, 610064, Sichuan, People’s Republic of China

    Haiyue Liu, Dongmei He, Jie Duan & Yile Wang

Authors
  1. Haiyue Liu
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  2. Dongmei He
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  3. Jie Duan
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  4. Yile Wang
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Corresponding author

Correspondence to Yile Wang .

Editor information

Editors and Affiliations

  1. Business School, Sichuan University, Chengdu, China

    Jiuping Xu

  2. Academy of Sciences of Moldova, Chisinau, Moldova

    Gheorghe Duca

  3. Faculty of Math and Science, Brock University, Hamilton, ON, Canada

    Syed Ejaz Ahmed

  4. ETSI Industriales de Ciudad Real, University of Castile-La Mancha (UCLM), Ciudad Real, Spain

    Fausto Pedro García Márquez

  5. Institute of Control Systems, Azerbaijan Natl Academy of Sciences, Baku, Azerbaijan

    Asaf Hajiyev

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Liu, H., He, D., Duan, J., Wang, Y. (2021). Executive Overconfidence and Performance of Corporate Cross-border Mergers and Acquisitions. In: Xu, J., Duca, G., Ahmed, S., García Márquez, F., Hajiyev, A. (eds) Proceedings of the Fourteenth International Conference on Management Science and Engineering Management. ICMSEM 2020. Advances in Intelligent Systems and Computing, vol 1191. Springer, Cham. https://doi.org/10.1007/978-3-030-49889-4_28

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