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Managerial decision, anchoring effects and acquisition premiums

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  • Sun, Yi
  • Xu, Shuaiqi
  • Wang, Yin

Abstract

This paper explores the anchoring effect, which is an irrational factor influencing decision-making regarding M&A premiums in M&A events. The study focuses on a sample of M&A transactions conducted by Chinese A-share listed companies between 2007 and 2021. We present significant evidence of the internal anchor anchoring effect in the M&A process in the internal anchor subsample. In the external anchor subsample demonstrates that external anchors have a certain degree of anchoring effects. When both anchors are present, the internal anchor exhibits a more significant anchoring effect compared to the external anchor.

Suggested Citation

  • Sun, Yi & Xu, Shuaiqi & Wang, Yin, 2023. "Managerial decision, anchoring effects and acquisition premiums," Finance Research Letters, Elsevier, vol. 58(PC).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pc:s1544612323008528
    DOI: 10.1016/j.frl.2023.104480
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