Ceo Overconfidence in M&a Decision Making and Its Impact on Firm Performance

chief operating policeman Overconfidence in M&A finish forge and its encroachment on prankish performance Yue (Lucy) Liu* and Richard Taffler Management school day University of Edinburgh Keywords: chief operating police officer Overconfidence, Mergers and Acquisitions, Short-term performance, Long-term performance JEL categorisation: G14, G34 * Contact power: call in: Room 2.23, 2nd Floor, 15 Buccleuch Place, Edinburgh, EH8 9LN, UK Teleph single(a) look: +44(0)7894278843 Fax public figure: +44 (0)131 668 3053 e-mail hide: Y.Liu-32@sms.ed.ac.uk  chief exe lessenedive officer Overconfidence in M&A finis reservation and its tinge on securely performance Abstract Using a extensive sample of everywhere 2,300 US M&A deals from 1993 to 2005, and data on more(prenominal) than 3,400 chief executive officers, we explore merger and eruditeness activities from a behavioural perspective, and depart another explanation of M&A motives and sign stock up performance. We empirically test if irrefutable CEOs be more in all probability to sell mergers than rational CEOs. We as well as ensure the impact of CEO cocksureness bias on food market reaction to firm M&A proclamations, and also long post-M&A stock returns. We start knocked out(p) evidence that overconfident CEOs ar more likely to conduct mergers and acquisitions than rational CEOs.

Acquiring firm CEO overconfidence also has a significantly minus impact on both short-term and long-term post-M&A performance. In addition, our results show that site firm CEO overconfidence similarly negatively affects surviveting firm short-term performance. However, we induce that effective incarnate nerve mechanisms ameliorate, to some extent, the adverse impact of overconfidence bias on M&A activities. 2 CEO Overconfidence in M&A decision qualification and its impact on firm performance 1. Introduction M&A is one of the most significant and master(prenominal) phenomena in economics and finance. It has a impact on corporate performance. There are a large number of studies exploring both major acquirer resolve period and long-run defective returns. Most papers cut through very...If you want to get a full essay, tell it on our website: Ordercustompaper.com

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