The Effect of Managerial Ability on the Investment Policy of Overconfidence CEOs
碩士 === 國立臺北大學 === 企業管理學系 === 105 === Previous research document that overconfidence is a double-edged sword to firms. In this study, we investigate the relation between managerial overconfidence and managerial ability. This study examines whether the successes of overconfident managers are attribute...
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| Format: | Others |
| Language: | en_US |
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2017
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| Online Access: | http://ndltd.ncl.edu.tw/handle/e7wfme |
| Summary: | 碩士 === 國立臺北大學 === 企業管理學系 === 105 === Previous research document that overconfidence is a double-edged sword to firms. In this study, we investigate the relation between managerial overconfidence and managerial ability. This study examines whether the successes of overconfident managers are attributed to their superior ability or pure lucky. Our findings suggest overconfident CEOs tend to invest more and the superior managerial ability can restrain their overinvest behavior but is not strong enough. From the perspective of risk-taking behavior of overconfident CEOs, the influence of managerial ability mitigates the increased risk weakly. Moreover, we find overconfident CEOs with higher ability increase the value of capital expenditure and therefore enhance firm value. At the end of this paper, we investigate whether board would select more able manager after passage of SOX or with better corporate governance. We find both of them could not select overconfident CEOs with higher ability.
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