Please use this identifier to cite or link to this item:
https://hdl.handle.net/20.500.14279/13633
DC Field | Value | Language |
---|---|---|
dc.contributor.author | Andreou, Panayiotis | - |
dc.contributor.author | Doukas, John A. | - |
dc.contributor.author | Koursaros, Demetris | - |
dc.contributor.author | Louca, Christodoulos | - |
dc.date.accessioned | 2019-05-15T19:13:58Z | - |
dc.date.available | 2019-05-15T19:13:58Z | - |
dc.date.issued | 2019-03 | - |
dc.identifier.citation | Journal of Banking & Finance, 2019, vol. 100, pp. 182-204 | en_US |
dc.identifier.issn | 03784266 | - |
dc.description.abstract | This study presents a theoretical model that links chief executive officer (CEO) overconfidence to the value loss of corporate diversification. Consistent with the model's prediction, the findings show that diversified firms run by overconfident CEOs experience value loss compared to diversified firms run by their rational counterparts. Empirically, the value loss is economically significant and ranges between 12.5% and 14.1%. In addition, the model predicts heightened corporate refocusing activity by overconfident CEOs who pursued diversified investments in the past once realized returns fail to match initial expectations. The empirical odds of corporate refocusing decisions are 67% to 98% higher when past diversifications are undertaken by overconfident rather than rational CEOs. Another prediction of the model is that overconfident CEOs exhibit preference for diversified investments, especially in the presence of ample internal funds. This prediction is also strongly supported by the data. Overall, this study proposes CEO overconfidence as a unified and consistent explanation of why firms pursue value-destructive corporate diversification policies and later adopt refocusing policies aiming to restore value. | en_US |
dc.format | en_US | |
dc.language.iso | en | en_US |
dc.relation.ispartof | Journal of Banking & Finance | en_US |
dc.rights | © Elsevier | en_US |
dc.subject | CEO overconfidence | en_US |
dc.subject | Diversification | en_US |
dc.subject | Diversification discount | en_US |
dc.subject | Firm performance | en_US |
dc.subject | Refocusing | en_US |
dc.title | Valuation effects of overconfident CEOs on corporate diversification and refocusing decisions | en_US |
dc.type | Article | en_US |
dc.collaboration | Cyprus University of Technology | en_US |
dc.collaboration | Durham University | en_US |
dc.collaboration | Old Dominion University | en_US |
dc.collaboration | University of Cambridge | en_US |
dc.subject.category | Economics and Business | en_US |
dc.journals | Subscription | en_US |
dc.country | Cyprus | en_US |
dc.country | United Kingdom | en_US |
dc.country | United States | en_US |
dc.subject.field | Social Sciences | en_US |
dc.publication | Peer Reviewed | en_US |
dc.identifier.doi | 10.1016/j.jbankfin.2019.01.009 | en_US |
dc.relation.volume | 100 | en_US |
cut.common.academicyear | 2018-2019 | en_US |
dc.identifier.spage | 182 | en_US |
dc.identifier.epage | 204 | en_US |
item.fulltext | No Fulltext | - |
item.cerifentitytype | Publications | - |
item.grantfulltext | none | - |
item.openairecristype | http://purl.org/coar/resource_type/c_6501 | - |
item.openairetype | article | - |
item.languageiso639-1 | en | - |
crisitem.journal.journalissn | 0378-4266 | - |
crisitem.journal.publisher | Elsevier | - |
crisitem.author.dept | Department of Finance, Accounting and Management Science | - |
crisitem.author.dept | Department of Finance, Accounting and Management Science | - |
crisitem.author.dept | Department of Finance, Accounting and Management Science | - |
crisitem.author.faculty | Faculty of Tourism Management, Hospitality and Entrepreneurship | - |
crisitem.author.faculty | Faculty of Tourism Management, Hospitality and Entrepreneurship | - |
crisitem.author.faculty | Faculty of Tourism Management, Hospitality and Entrepreneurship | - |
crisitem.author.orcid | 0000-0001-5742-0311 | - |
crisitem.author.orcid | 0000-0003-3516-0680 | - |
crisitem.author.orcid | 0000-0003-3436-3734 | - |
crisitem.author.parentorg | Faculty of Management and Economics | - |
crisitem.author.parentorg | Faculty of Management and Economics | - |
crisitem.author.parentorg | Faculty of Management and Economics | - |
Appears in Collections: | Άρθρα/Articles |
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