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https://hdl.handle.net/20.500.14279/13651| Title: | CEO overconfidence and the value of corporate cash holdings | Authors: | Aktas, Nihat Louca, Christodoulos Petmezas, Dimitris |
Major Field of Science: | Social Sciences | Field Category: | Economics and Business | Keywords: | Overconfidence;Innovation;Managerial overconfidence | Issue Date: | Feb-2019 | Source: | Journal of Corporate Finance, 2019, vol. 54, pp. 85-106 | Volume: | 54 | Start page: | 85 | End page: | 106 | Journal: | Journal of Corporate Finance | Abstract: | Cash holding is on average more valuable when firms are managed by overconfident CEOs. Economically, having an overconfident CEO on board is associated with an increase of $0.28 in the value of $1.00 cash holding. The positive effect of CEO overconfidence on the value of cash concentrates among firms that are more likely to suffer from the underinvestment problem (i.e., financially constrained firms which exhibit high growth opportunities). In addition, CEO overconfidence affects negatively the value of cash in firms that are financially unconstrained, a finding which is consistent with the overinvestment hypothesis. The results are robust to various tests and alternative explanations. | ISSN: | 09291199 | DOI: | 10.1016/j.jcorpfin.2018.11.006 | Rights: | © Elsevier | Type: | Article | Affiliation : | WHU Otto Beisheim School of Management University of Surrey Cyprus University of Technology |
Publication Type: | Peer Reviewed |
| Appears in Collections: | Άρθρα/Articles |
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