Can Executive Overconfidence Affect the Risk of Stock Price Collapse?——Empirical Research Based on M&A Premiums
Based on empirical research on A-share listed companies in Shanghai and Shenzhen from 2010 to 2020,this paper introduces the intermediary variable of M&A premium and analyzes the acting mechanism of how executive overconfidence affects the risk of stock price collapse.The research results show that:The higher the de-gree of executive overconfidence,the higher the risk of stock price collapse faced by the company;executive over-confidence will significantly increase the level of M&A premium of the company,thereby exacerbating the risk of stock price collapse.A further analysis finds that this mechanism has different effects in enterprises with different property rights natures,and compared with state-owned enterprises,non-state-owned enterprises suffer more signif-icant effects.Based on the above,this paper puts forward such precautionary measures as reducing executive over-confidence,improving the disclosure system of information,inhibiting M&A premium and establishing mechanisms of risk monitoring and early warning with a view to promoting the stable and healthy development of capital markets.
Executive overconfidenceStock price collapse riskM&A PremiumProperty rights nature
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