The Hubris Hypothesis: Empirical Evidence

Bodt, Eric de; Cousin, Jean-Gabriel; Roll, Richard

doi:10.2139/ssrn.2463865

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The Effect Of Managers' Overconfidence On Merger and Acquisi...1

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2022

2023

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“…De Bodt et al (2014) examined 977 companies that made purchases in the USA and stated that 95% of them were successful. It has been revealed that acquiring firms bid more than the amount that maximises the shareholder value of the target firm.…”

Section: The Effect Of Managers' Overconfidence On Merger and Acquisi...mentioning

confidence: 99%

Birleşme ve Satın Alma Gerçekleştiren Firma Yöneticilerinin Aşırı Güven Davranışlarının Firma Değeri Üzerine Etkisi

CAN>¹,

DİZDARLAR>²

2022

Sosyoekonomi

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This study aims to examine the effect of overconfidence behaviours of the managers of the companies whose stocks are traded in Borsa Istanbul on the firm value. In the study, a model was created for Tobin q (Model 1), stock market value (Model 2) and enterprise value (Model 3). As a result of the study, a negative relationship was determined between the change in firm value and the overconfidence variable. According to this result, if the managers performing mergers and acquisitions are overconfident, the incorrect decision may be made while determining the firm value. This leads to a decrease in the wealth of the shareholders. In this respect, managers' overconfidence should also be considered while performing mergers and acquisitions in firms.

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Section: The Effect Of Managers' Overconfidence On Merger and Acquisi...mentioning

confidence: 99%