| Summary: | 碩士 === 國立臺灣大學 === 財務金融學研究所 === 107 === According to previous research, investment decisions made by over-confident CEOs are subject to cash resources. Over-confident CEOs tend to over-estimate their investment decisions. Moreover, when needing external financing, they must bear the higher cost of capital. So, Over-confident CEOs give priority to bonds when they have external financing needs. Therefore, they are prone to generating more debts than general CEOS do. In this summary, If a company has sufficient internal funds, CEO has the possibility of over-investment. But if it is necessary to external financing, CEO will relatively reduce spending. On the other hand, Hirshleifer et al. (2012) found that a company would choose overconfident CEO because he or she would be engaged in highly specialized and high-risk jobs which increase the R&D expenditure and finally let their shareholder profit. Empirical results found that innovative activities were significantly enhanced by overconfident managers, further increasing R&D and increasing patent rights to enhance corporate value. However, Lin and Wang (2016) found that empirical results show that R&D expenditure has a positive correlation effect on the probability that firms are merged. Therefore, this study analyzes the impact of CEO''s Overconfidence on the probability of being acquired by the firm itself. The empirical results show that the manager''s overconfidence has a positive relationship with the impact of the firm''s own acquisition probability.
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