CEO Overconfidence and Corporate Hedging Activities

• Main Authors: ONG, WEI CHEN, 王偉權
• Other Authors: CHEN, TSUNG-KANG
• Format: Others
• Language: zh-TW
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/47p99a

碩士 === 輔仁大學 === 金融與國際企業學系金融碩士班 === 106 === This paper explores the relation between CEO overconfidence and corporate hedging activities by Taiwan stock markets data from 2009 to 2014.The empirical results show that the high-overconfident CEO negatively relates to corporate hedging activities. It means that the CEOs with highly overconfident personality traits in the company tend to overestimate their ability to predict the future, therefore they will not be using hedging in the process of investing heavily in high risk financial instruments. After adding control variables, the empirical results still show a negative relation between high-confidence CEO and hedging activities. Otherwise low-overconfident CEO positively relates to corporate hedging activities. Moreover, the results also show that when companies have higher quick ratios or firm sizes, high-overconfident CEO negatively relates to corporate hedging activities. Meanwhile, when companies have lower quick ratios or firm sizes, low-overconfident CEO positively relates to corporate hedging activities.