CEO Overcon.dence or Stock Mispricing and Growth? Reexamining the Effect of CEO Option Exercise Behavior on Corporate Investment
Malmendier and Tate (2005) use CEO late option exercise to proxy for unobservable CEO overcon.dence and argue that managerial overcon.dence can account for investment dis-tortions. Consistent with CEO rationality, this paper provides an alternative explanation to their.ndings. By breaking the market-to-book ratio into.rm mispricing, industry mis-pricing, and growth opportunity, We.nd that industry mispricing and growth opportunities in.uence both CEO option exercise and corporate investment. When.rms are overvalued or have better growth opportunities, CEOs are more likely to postpone their option exercise and at the same time invest more using internal cash. Moreover, CEO late option exercise fails to explain investment decisions after controlling for mispricing and growth opportunities. These.ndings suggest that a CEO.s personal portfolio decision may not be an appropriate proxy for managerial overcon.dence.
国际会议
Third Shanghai Winter Finance Conference(第三届上海冬季金融研讨会)
上海
英文
1-48
2010-12-18（万方平台首次上网日期，不代表论文的发表时间）