Abstract: By a way of theory model establishment, the influence of check-and balance ownership structure on the M&A performance under idiosyncratic expectations is investigated in this paper. The results show that investors' idiosyncratic expectations will lead to the declining adjustment of acquirer's stock price after M&A transaction, and then result in the drop of M&A performance, which is measured by stock price. Under appropriate idiosyncratic expectations, the check-and-balance ownership structure will reduce the extent of M&A performance drop. The higher the check-and-balance degree is, the better the M&A performance will be. However, along with the strengthen of idiosyncratic expectations, the influence of check-and balance ownership structure on the M&A performance will become nonlinear when idiosyncratic expectations go beyond the appropriate range.

Key words: idiosyncratic expectations, check-and-balance ownership structure, M&A performance