Abstract：With the scale expansion of Chinese enterprises' international M&A, the long-term performance of M&A has shown declining signs. Since the traditional financial perspective has been unable to fully explain the decline in operating results, we need to return to decision-making subject to research. Classical financial theory holds that the behavioral subject is rational and judged according to the principle of risk-return in decision-making. The research of behavioral finance has shown that manager is always more or less bounded rational, leading to the inability to fully comply with traditional financial decision-making principles and making business decisions deviate from optimal choice, thereby undermining corporate value. Overconfidence is considered to be the most robust finding of the manager's psychological bias, which displays the feature of “overestimating the benefits, underestimating the risk”. Unlike managers with empire-building preferences, who consciously disregard shareholders' interests, overconfident CEOs believe they are maximizing value. Scholars have already demonstrate overconfident managers may overpay for target companies and undertake value-destroying mergers for they overestimating their ability to generate returns. However, as the higher uncertainty and complexity in international mergers and acquisitions, the role of overconfidence in international M&A has not being fully uncovered.Based on the theory of organizational learning and behavioral finance, this paper focuses on the impact of the board of director's overconfidence on the long-term performance in international mergers and acquisitions, so as to further studies how to reduce the adverse effects of overconfidence. The paper argues that overconfident managers are likely to make lower-quality international M&A due to the overestimation of future returns from acquisitions. However, compared to the rational managers, overconfident managers are more willing to study new plans, and they are more likely to learn advanced knowledge in the M&A which have a long culture distance and improve the M&A performance. Besides, the overseas experience of the directors may also correct the cognitive deviation from overconfidence in the international M&A for their standing of overseas operation. To test these theoretical propositions, the paper uses the data of listed companies in Shanghai and Shenzhen Stock Exchanges in China which have successfully implemented international mergers and acquisitions from the year 2006 to 2014, and use the board of directors' voluntary holding of the stock as the proxy of managers' overconfidence. The empirical results show that the board's overconfidence has a significantly negative impact on the international M&A performance. A further research shows that the cultural distance between the two sides and the overseas experience of the board members can significantly reduce the negative effect. The result of the research demonstrate that the manager's psychological bias have a significant impact on the international M&A performance which supplement the study of overconfidence in the field of international mergers and acquisitions. Overconfidence provides an alternative interpretation of agency problems in firms and of the origin of private benefits. Thus, standard incentive contracts and traditional corporate governance are unlikely to correct their sub-optimal decisions. Furthermore, the results also shed light on M&A practices and organizational design. The results show that the choice of M&A target and the change of corporate governance structure can reduce the decision-making bias caused by the overconfidence of the board, which provides evidence for perfecting the decision-making mechanism of the board of directors.This research explores the impact of managers' irrational factors and improves international M&A performance from the perspectives of psychological characteristics, the choice of target companies and corporate governance, which breaks through the scope of original financial point of view to explain the performance of mergers and acquisitions, complementing the changes of situation and the personnel characteristics. The findings also enrich the behavior of financial theory and practice content.

Keyword：the board's overconfidence; cultural distance; overseas background of directors; international M&A performance;