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

chief in operation(p) officer cocksureness in M&A finish fashioning and its encroachment on irritated performance Yue (Lucy) Liu* and Richard Taffler Management school day University of Edinburgh Keywords: chief operating officer Overconfidence, Mergers and Acquisitions, Short-term performance, Long-term performance JEL Classification: G14, G34 * come across power: Address: Room 2.23, 2nd Floor, 15 Buccleuch Place, Edinburgh, EH8 9LN, UK Teleph one(a) grammatical construction: +44(0)7894278843 Fax number: +44 (0)131 668 3053 e-mail address: Y.Liu-32@sms.ed.ac.uk chief operating officer Overconfidence in M&A decision reservation and its wedge on firm performance Abstract employ a extensive sample of over 2,300 US M&A deals from 1993 to 2005, and data on more than 3,400 CEOs, we explore unification and acquisition activities from a behavioural perspective, and provide another score of M&A motives and firm stock performance. We empirica lly try on if overconfident CEOs be more credibly to conduct mergers than sensible CEOs. We also ensure the impact of CEO overconfidence prejudice on food market reaction to firm M&A proclamations, and also long post-M&A stock returns. We trip out evidence that overconfident CEOs ar more likely to conduct mergers and acquisitions than rational CEOs.

Acquiring firm CEO overconfidence also has a significantly disconfirming impact on both short-term and long-term post-M&A performance. In addition, our results figure that target firm CEO overconfidence similarly negatively affects acquiring firm short-term performance. However, we find that effective! somatic governance mechanisms ameliorate, to some extent, the adverse impact of overconfidence preconceived idea on M&A activities. 2 CEO Overconfidence in M&A decision making and its impact on firm performance 1. Introduction M&A is one of the most significant and important phenomena in political economy and finance. It has a impact on corporate performance. There atomic number 18 a large number of studies exploring both major acquirer announcement period and long-run abnormal returns. Most document cut through very...If you want to get a beneficial essay, order it on our website: OrderCustomPaper.com

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