Influence of CEO Overconfidence on the M&A Activity and Performance

Student: Mandych Dmitry

Educational Programme: Strategic Corporate Finance (Master)

Year of Graduation: 2016

Main purpose of this research: to reveal influence of CEO overconfidence on M&A activity and performance in developed capital markets. Research was conducted on sample of developed countries during 2013-2015. In this research was offered and tested new method of measurement of CEO overconfidence. New method and last available data sample makes this study particularly valuable. Besides two main phenomena, the other characteristics of the CEO were taken into account in this research. According to results: CEO overconfidence has significant positive impact on the M&A activity, and also has significant negative influence on M&A performance. Also it was found out that the size of the company and pre-retirement age of CEO positively influence M&A activity, deal size has negative connection with deal performance, the share of independent directors in board of directors has negative impact on CEO overconfidence, and a salary, on the contrary influence CEO overconfidence positively.

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