The performance effect of CEO overconfidence on corporate long-term valuation: the case of international mergers and acquisitions

The effect of CEO overconfidence on firm performance has arouse great research interests because many CEOs are found characterized by overconfidence. By analysing international merger and acquisition (IMA) investments conducted by US companies between the periods of 2010-2020, this study finds different contingency effect of CEO overconfidence on corporate IMA long-term valuation, specifically from the following three perspectives: the degree of international diversification, degree of industrial interrelation, and culture distance between the merger and target. Findings of the present study can contribute to the literature by highlighting the importance of taking a contingency view to assess the influence of managerial overconfidence on the outcomes of firm strategic investment.