|Title:||The Impact of Market-Nurtured Optimism on Mergers:||Authors:||Shu, Pei Gi
Yeh, Yin Hua
Wang, Li Hui
|Keywords:||corporate governance | mergers | Overconfidence||Issue Date:||1-Sep-2013||Journal Volume:||16||Journal Issue:||3||Source:||Review of Pacific Basin Financial Markets and Policies||Abstract:||
We create a novel measure of market-nurtured optimism in that managers become more optimistic if the market had responded more favorably, and to a larger extent to positive earnings surprises, than to negative earnings surprises. These market-nurtured managers are prone to engage in value-destructive mergers. The inclination is further reinforced by abundant internal cash. In contrast, a good governance structure mitigates the odds of engaging in mergers and the detrimental effect associated with mergers. The acquisitions launched by overconfident managers are associated with lower market value. © 2013 World Scientific Publishing co.and Center for Pacific Basin Business, Economics and Finance Research.
|Appears in Collections:||財務金融學系|
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.