Abstract

http://ssrn.com/abstract=1982286
 
 

References (40)



 
 

Citations (2)



 
 

Footnotes (7)



 


 



CEO Overconfidence and International Merger and Acquisition Activity


Stephen P. Ferris


University of Missouri at Columbia - Department of Finance

Narayanan Jayaraman


Georgia Institute of Technology - Finance Area

Sanjiv Sabherwal


University of Texas at Arlington - Department of Finance and Real Estate

October 25, 2011

Journal of Financial and Quantitative Analysis (JFQA), Forthcoming

Abstract:     
This study examines the role that CEO overconfidence plays in an explanation of international mergers and acquisitions during the period 2000-2006. Using a sample of CEOs of Fortune Global 500 firms over our sample period, we find that CEO overconfidence is related to a number of critical aspects of international merger activity. Overconfidence helps to explain the number of offers made by a CEO, the frequency of diversifying acquisitions, and the use of cash to finance a merger deal. Although overconfidence is an international phenomenon, it is most extensively observed in individuals heading firms headquartered in Christian countries that encourage individualism while de-emphasizing long-term orientation in their national cultures.

Number of Pages in PDF File: 49

Keywords: overconfidence, mergers, hubris, behavioral

JEL Classification: G35, C23

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Date posted: January 10, 2012  

Suggested Citation

Ferris, Stephen P. and Jayaraman, Narayanan and Sabherwal, Sanjiv, CEO Overconfidence and International Merger and Acquisition Activity (October 25, 2011). Journal of Financial and Quantitative Analysis (JFQA), Forthcoming. Available at SSRN: http://ssrn.com/abstract=1982286

Contact Information

Stephen P. Ferris
University of Missouri at Columbia - Department of Finance ( email )
214 Middlebush Hall
Columbia, MO 65211
United States
573-882-6272 (Phone)
573-884-6296 (Fax)
Narayanan Jayaraman
Georgia Institute of Technology - Finance Area ( email )
755 Ferst Drive
Atlanta, GA 30332
United States
404-894-4389 (Phone)
404-894-6030 (Fax)
Sanjiv Sabherwal (Contact Author)
University of Texas at Arlington - Department of Finance and Real Estate ( email )
Box 19449 UTA
Arlington, TX 76019
United States
817-272-5520 (Phone)
817-272-2252 (Fax)
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References:  40
Citations:  2
Footnotes:  7

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