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This paper focuses on the influence of overconfident managers on strategic investment acquisitions performance, by investigating the influence of key contextual factors on acquirers’ returns of UK domestic and cross-border acquisitions during the period 2000-2009. In this study, particular attention has been paid to management attributes (frequent acquirers vs non-frequent acquirers); method of payment (cash vs non-cash deals); the geographic scope (domestic vs cross-border deals); the type of the target (public vs private); the industry scope; and the relative size.

An event study is used to analyse domestic and cross-border acquisitions. The market model is used for estimating the acquirers’ abnormal returns of 1,133 domestic and cross-border acquisitions by UK firms between 1 January 2000 and 31 December 2009.

The findings reveal that acquirers with domestic targets have higher returns than cross-border targets. Infrequent acquirers generate higher returns from domestic and cross-border acquisitions than frequent acquirers. Further, acquirers that acquire domestic targets from different industrial sectors produce higher returns than acquirers with targets from the same sector. Acquirers with cash deals, private targets and high book-to-market ratio generate significant returns compared to acquirers with non-cash deals, low book-to-market ratio and public targets and that for domestic and cross-border deals. These results suggest that UK domestic and cross-border acquisitions are partially shaped by overconfident managers.

The study has a number of limitations, including the use of the market model, the data-collection process and the limited number of contextual factors. Future research may examine a number of avenues related to the current study, including incorporating the acquiring firms’ financial characteristics.

The study provides a better understanding of the influence of contextual factors on the success and failure of strategic investment projects such as acquisitions. Results of post-acquisitions performance in UK firms show how estimation of value can be distracted at the pre-acquisition stage because of overconfident managers.

Results of post-acquisitions performance in UK firms show how estimation of value can be distracted at the pre-acquisition stage because of overconfident managers.

Companies documents such as annual reports incorporate narratives of repetitive rhetorical strategies as effective mechanisms adopted by companies' boardrooms to promote strategic change and strategic choices. These mechanisms can be viewed as persuasive appeals to facilitate boardrooms’ discourses. Despite the contribution of previous research through narrative analysis domains, conceptualization of narrative practices remains a relatively neglected area in the extant accounting literature.

The analytical framework is rooted in Aristotle's three pillars of rhetorical proofs: ethos (credibility/trustworthiness), pathos (emotion/identification through cultural domains) and logos (reason/rationale) in investigating narrative extracts regarding persuasive appeals adopted by Carillion's board through annual reports that facilitate discourse regarding Carillion’s strategic choices. Further, the authors emphasis on repetitive rhetorical slogan strategies embedded in the annual reports regarding Carillion's acquisitions strategy. We viewed acquisitions narratives as rhetorical communication artefacts and analyzed the repetitive rhetoric slogans in these corporate documents.

Findings of this study show how persuasive strategies and repetitive slogans trigger the discourses of Carillion's annual reports by drawing on perspectives from upper echelon theory, impression management and communication patterns. Findings reveal that Carillion’ board strategically use repetitive rhetoric slogans to shape optimistic corporate future performance which might be different from the feasible reality. Finally, the authors argue that corporate executives are striving to construct an alternative reality stem from their initial unrealistic aspiration to lead their sector of less controlled market share. Findings of this study have theoretical and managerial implications.

The key limitation of this study lies with the case study as the research methodology. Subjectivity remains inherent in interpreting the findings of this study. Future studies may adopt or adapt the authors’ analytical framework to examine other domains underpinning corporate reporting practices.

The findings of this study have practical implications for boardrooms and policymakers. Findings of this study have theoretical and managerial implications. The level of optimism has its impact on the mood of financial decision-makers, and when there is a high level of optimism, managers may consider making more investment decisions and therefore making many acquisitions. Managerial overconfidence has been widely documented in the literature. Overconfident managers systematically overestimate the probability of good outcomes (and correspondingly underestimate the probability of bad outcomes) resulting from their actions.

Managerial overconfidence refers to overestimation of managers' own abilities and outcomes relating to actions which are under their control. Executives believed that they have ultimate control over outcomes, which leads them to underestimate the probability of failure generally. According to self-attribution bias, many people tend to excessively credit their own skills for good results and overly credit external factors for bad outcomes.

The study explores the repetitive rhetorical slogan strategies embedded in the annual reports regarding Carillion's acquisitions strategy. Further, the study reveals how Carillion's board engaged through the early report with discourse and repetitive slogans to maintain their legitimacy. Findings reveal that Carillion’s board strategically uses repetitive rhetoric slogans to shape optimistic corporate future performance, which might be different from the feasible reality. Finally, the authors argue that corporate executives are striving to construct an alternative reality stem from their initial unrealistic aspiration to lead their sector of less controlled market share.

A new era of M&A is emerging, characterized by new wave of strategic investment decision-making practices (SIDMP) toward Industry 4.0 (I4.0) technologies and circular economy. The digital technologies play a significant role in circular economy transitions and companies’ performance This includes investment in capability development, vertical and horizontal integration, effective procurement practices, and effective strategic control mechanisms. The circular economy strategy is more than just recycling and environmental concerns. It unlocks new strategies and new ways of strategic thinking. Its rapid expansion, as a new norm for companies, has characteristics of a fast-expanding market, given its exponential growth. Yet, there is a need to boardrooms commitment and responsibilities including oversight and support and a full-integrated organizational structure, sales, logistics, marketing, production, development, design, supply management, finance, human resources, and legal. To achieve successful implementation of SIDMP and M&A, companies should gather information on environmental, social, and governance issues. Therefore, it is critical to prioritize their strategies and identify areas that present the greatest risk on environmental and social issues including human rights, labor, and ethical issues in the companies supply chain. By creating shared values between society and shareholders, companies can maintain long-term success, legitimacy, and credibility. This chapter offers debate on recent developments in research and practice regarding SIDMP and synergy between I4.0 and circular economy.

The purpose of this paper is to examine the impact of cross-border acquisitions (CBAs) on the financial and operating performance of acquiring firms from emerging economies in the long-term; the acquiring firms have been segregated into frequent (multiple) and first-time (single) acquirers based on their prior cross-border experience. The intent is to identify if overseas activities bring over and above advantage to multiple acquirers in terms of enhanced financial synergies and reduced costs, motivating them to engage in sequential international transactions.

The paper analyses the impact of CBAs announced and completed during 2004–2013 by Indian companies listed on the NIFTY 500 index. The post-acquisition financial and operating performance of Indian cross-border acquirers has been compared with their pre-acquisition performance. The average performance over three-years immediately preceding the acquisition year constitutes the benchmark for the post-acquisition performance. The post-acquisition period includes a year of integration followed by three successive post-integration years. Therefore, in operational terms, the research period extends from 2001–2017. The long-term performance of frequent (multiple) and first-time (single) Indian acquirers has been investigated comprehensively using a set of 16 financial ratios. The performance has been assessed using the secondary data collected from financial statements of acquiring companies; the financial statements and the list of CBAs by Indian companies have been obtained from Thomson Reuter’s EIKON database.

The financial and operating performance of frequent as well as first-time acquirers have depicted a similarly deteriorating trend during the post-acquisition period. These findings indicate that the international expansion of Indian companies is not guided by synergy creation potential and may be pushed by the overconfidence or over-optimism and agency conflicts of managers. This, perhaps, indicates that firms are being imprudent in investing free cash flows available with them.

The study is the first of its kind. No study, to the best of the authors’ knowledge, has analysed the performance of acquiring firms by segregating them into frequent and first-time acquirers using accounting measures of performance. More so, an extensive analysis of the long-term financial and operating performance of acquiring companies is rare to come across in the extant literature.

Financial flexibility, investment efficiency and effective corporate governance mechanisms have been issues of concern to stakeholders. Yet, little empirical evidence on the combined moderating effects investment efficiency and corporate governance mechanisms on the nexus between financial flexibility and firm performance. This study aims to address this gap and extend the extant literature by examining the moderating effects of corporate governance and investment efficiency on the nexus between financial flexibility and financial performance.

The empirical study is based on progression analysis using a sample of 13,865 US listed companies selected from BoardEx (WRDS) for the period (2010–2022) with 89,198 firm-year observations.

Findings of this study indicate that financial flexibility improves firm value as well as accounting performance. Furthermore, the results reveal that both investment efficiency and corporate governance moderate the effect of financial flexibility on firm performance. The authors complement and extend the literature on the optimal investment strategies domain by showing that the combined impact of corporate governance mechanisms and investment efficiency strengthens the nexus between financial flexibility and firm performance.

Key limitations of this study due to the characteristics of the sample selection: country-specific context and proxies used by this study.

Findings of this study have managerial and theoretical implications for firms’ boardrooms, institutional and individual investors, regulators, academics and other stakeholders regarding behavioural aspects of investment decision-making.

The authors’ novel contribution to the extant literature is articulated by the conceptual framework underlying this study and by the new evidence regarding exploring the combined effect of corporate governance mechanisms on nexus between financial flexibility and companies’ performance.

The study aims to evaluate and compare the mergers and acquisitions (M&As) performance utilising a sample of deals originating from Brazil, Russia, India, China and South Africa (BRICS). In addition to nation-wise performance analysis, a further sub-sample analysis is conducted based on the target location (domestic and cross-border), development status (developed and emerging) and the acquired ownership stakes (majority and minority).

The final sample of the study includes 7,105 deals announced between 2000 and 2019. M&A performance is proxied by the abnormal returns earned over the select event windows. Multiple parametric and non-parametric tests are employed for testing the robustness.

The results indicate significant performance differences across BRICS markets, with the highest and lowest abnormal returns reported for Chinese and Russian acquirers, respectively. The disaggregated analysis also affirms the performance differences for the select sub-samples.

The study highlights the need for acknowledging and expounding the differences in M&As across emerging markets. Further, the results of the study provide a possible explanation of the disagreement over the M&A performance results reported in the previous literature.

Acknowledging and understanding the potential performance differences based on location, ownership strategies and development status can aid executives in sharpening decision-making and also help general investors.

The study contributes by examining a comprehensive sample of deals across five major emerging economies, as against the majority of previous studies which have their results based on either single nation samples or have utilised only a sub-sample of domestic or foreign acquisitions.

Scholars have been conducting serious research mainstream on the human, organizational and cultural aspects of mergers and acquisitions (M&A) for more than three decades. The current globalization is faced by the challenge to meet the continuously growing worldwide demand for capital and consumer goods by simultaneously ensuring a sustainable evolvement of human existence in its social, environmental and economic dimensions. Currently, a new era of M&A is emerging through a wave of strategic investment decision-making toward Industry 4.0 (I4.0) strategy. The new waves of M&A can be viewed as comprehensive integration of manufacturing systems, production processes, digital communications technologies and automated machines. I4.0 strategy will make supply chains and production processes more interconnected, efficient and flexible, allowing mass-customization and virtual production. This chapter offers state of the art review of I4.0 based on recent developments in research and practice. This chapter offers an overview of opportunities and challenges associated with M&A activities toward I4.0, and suggestions for future research.

This paper aims to provide early evidence on corporate transformation towards Industry 4.0 (CTTI4) in the UK, particularly by examining the effect of corporate governance on the narrative reporting of CTTI4.

The authors analyse all UK financial times stock exchange all-share non-financial firms that have published their annual reports for the period of 2013–2018. The authors use computerised textual analysis to measure the level of corporate reporting on Industry 4.0 (I4.0) for 1,001 firm-year observations. The authors used different regression models to test the research hypotheses.

The findings contribute to the growing literature on business model transformation in UK companies towards the I4.0 strategy. The findings show that the level of reporting on CTTI4 is improving over the sample period and varies between industries. The authors also find that better governance quality enhances the level of reporting on CTTI4.

The findings of this study inform decision makers and regulators about factors driving UK companies to report information about their actionable strategies to direct I4.0 endeavours.

The paper makes an important and novel contribution to corporate disclosure literature. So far as the authors know, it is the only paper to examine the impact of corporate governance on corporate narrative reporting on I4.0 technologies. Moreover, to the best of the authors’ knowledge, it is the first paper to show that the quality of corporate governance adds value to this strategic type of corporate disclosure.

This paper aims to investigate whether managerial overconfidence has an impact on investment inefficiency beyond its influence on the use of internal financing or whether internal financing behaves as a full intermediary.

The study employed three dependent variables, namely business investment scale, overinvestment and underinvestment, and analyzed data from 282 firms across five different industries listed in 11 Middle East/North Africa (MENA) countries between 2013 and 2019 using regression analysis via least square dummy variable (LSDV).

The findings indicate that while internal financing can provide funding for investment opportunities and address capital shortages, it may also result in overinvestment, particularly in companies led by overconfident managers.

Stakeholders, including shareholders and board of directors, should pay attention to the chief executive officer (CEO)'s behavioral aspects such as overconfidence in decision-making while undertaking new investment projects. Additionally, regulators and policymakers in emerging markets like MENA should re-evaluate the corporate governance framework, devise a corporate governance index and promote boardroom gender diversity as it can significantly reduce risk.

This study adds to the limited research on the impact of managerial overconfidence on investment efficiency in the MENA region. By focusing on this region, which has unique economic, political and social characteristics, the study provides new insights into the role of behavioral biases in investment decision-making in emerging markets.

This study aims to analyse the role of the financial and accounting expertise of the chief executive officer (CEO) on financial reporting quality (FRQ) in an emerging economy.

This study is based on data collected from a large sample of all non-financial companies listed on Vietnamese stock exchanges during the period 2016–2020 with 2,435 observations. FEM-ROBUST standard errors regression model is used to examine the relationship between the financial, accounting expertise of CEOs and FRQ through earnings management by discretionary accruals.

The results show that CEOs with financial and accounting expertise have more influence and intervention on earnings management and thus adversely affect FRQ. This behaviour is explained by the fact that CEOs not only have a firm grasp of financial and accounting policies but also know the tricks to interfere with earnings management. Moreover, in the context of emerging economies, CEOs’ awareness and management level are still limited and legal sanctions are not yet strict, so when they have power in their hands, CEOs immediately find ways to build a reputation to enhance the power and earnings for the CEOs themselves.

The limitation of this study is first of all that the research data are not complete and rich because the companies are prohibited from disclosing information and the cooperation relationship is not close. Next is the new research in only one emerging market – Vietnam – so the generalizability is not high.

To the best of the authors’ knowledge, this is the first study to examine the impact of CEOs’ accounting and finance expertise on FRQ in an emerging economy, contributing to the existing literature regarding the scientific debates about CEOs, CEO characteristics, earnings management and FRQ.