The empirical research on the influence of managerial overconfidence on the mergers and acquisitions decision

In recent years, merger and acquisition has become the main means of expanding for Chinese listed companies. Meanwhile, the manager has played an increasingly important role when the company tries to make acquisitions. Based on the viewpoint of behavioral finance, managers are more likely to become overconfident. Therefore, it is very necessary to apply the theory of managerial overconfidence to the research on motivation of M&A. This paper selects company samples listed between 2013 and 2015 in Shanghai and Shenzhen Stock Exchange to do an empirical research about the effect of managerial overconfidence on mergers and acquisitions decision. The conclusion shows that managerial overconfidence significantly influences the mergers and acquisitions decision. In other words, overconfident managers are more inclined to implement mergers and acquisitions.