What is CEO overconfidence? Evidence from executive assessments

• 成果类型: Article
• 署名作者: Kaplan, Steven N.; Sorensen, Morten; Zakolyukina, Anastasia A.
• 署名单位: University of Chicago; National Bureau of Economic Research; Dartmouth College
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2021.09.023
• 发表日期: 2022
• 页码: 409-425
• 关键词: CEO characteristics; ceo overconfidence; Corporate investment

摘要

We use detailed assessments of CEO personalities to explore the nature of CEO overconfidence as it is commonly measured. Longholder, the option-based measure of CEO overconfidence introduced by Malmendier and Tate (2005a) and widely used in the behavioral corporate finance and economics literatures, is significantly related to several specific characteristics that are associated with overconfident individuals as well as individuals with lower ability. Similar relations hold for overconfidence measures based on CEOs' earnings guidance. Investment-cash flow sensitivities are larger for both Longholder and less able CEOs. After controlling for ability and other characteristics, Longholder CEOs' investments remain significantly more sensitive to cash flows. These results suggest that overconfidence, as measured by Longholder, is correlated with lower ability but still reflects empirically distinct aspects of overconfidence. (C) 2021 Elsevier B.V. All rights reserved.