The Effect of Chinese Listed Company Manager’s Inrrational Merger and Acquisition Decision on the Performance

Abstract

This paper studies the merger and acquisition (M&A) activity of Chinese listed companies based on the frame of irrational behaviors. It defines the irrational behaviors of the listed company’s manager as overconfidence, and it also builds up the discriminant model to figure out the overconfidence. It is obvious that this study is beneficial for Chinese listed company’s manager to figure out their irrationality. With the help of improved Z-Score model, it evaluates the performance of irrational Merger and Acquisition, which is caused by overconfidence. Obviously, the research on this issue is beneficial to conduct system analysis of the irrational behavior of listed company’s Merger & Acquisition decision, it will also encourage listed company to improve their successful rate and performance of merger and acquisition, in order to keep the pace with Chinese securities market evolution and the development of marketing economics.