Abstract
ABSTRACT This study investigates the relationship between CEO risk preferences in companies completed mergers and acquisitions (M&A) and the goodwill generated by M&A. The analysis period ranges from 2014 to 2018, which represents the recent ‘boom’ in China’s M&A market. We estimate CEO risk preference by using factor analysis and regress the goodwill on CEO risk preference while controlling for firms’ characteristics. The results show that CEOs with a high-level risk preference are willing to accept a higher value of goodwill. This positive correlation is more significant in non-state-owned or lower ownership concentration companies, and firms within a suitable debt capacity.
Published Version
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