CEO Hubris, Firm Investmemt and Firm Performance
Using the data of Chinese publically traded firms from 2002-2005, we examine the relationship between managerial overconfidence and firm expansion and find that managerial overconfidence is positively correlated with the rate of firm expansion. In particular, overconfident managers tend to internally expand firms in an aggressive manner. Also a negative, though not statistically significant, relationship exists between managerial overconfidence and M&A activity. Lastly, this paper examines the relationship between managerial overconfidence and firm performance and finds that managerial overconfidence decreases firm value due to overinvestment.
Managerial overconfidence Firm expansion Firm performance
LIU Huanhuan XIE Lu
School of Business, Renmin University of China, P.R.China, 100872
国际会议
贵阳
英文
149-154
2011-12-17（万方平台首次上网日期，不代表论文的发表时间）