Firms that follow excessive payout policies (over-payers) are higher on the financial distress spectrum and have lower survival rates than under-payers. In addition, over-payers endure future sales asset growth under-payers experience negative abnormal returns in bond stock markets. Exogenous import tariff reductions commodity price jumps reduce likelihood of overpayment. We interpret this as e...

This paper investigates whether the personal trading decisions of CEOs are related to their corporate acquisition decisions. We find that the personal trading performance of CEOs is significantly and positively related to the short-term market reaction to their mergers and CEOs exhibiting greater turnover on their personal common equity portfolios undertake acquisitions more frequently. Hence a...

This paper studies whether banks charge higher or lower interest rates on loans to firms with overconfident CEOs. It establishes a theoretical model to show the relationship between the loan rate and overconfidence of the borrowing firm’s CEO. It also conducts empirical analyses to test the predictions of the model. As predicted in the model, firms with overconfident CEOs enjoy lower loan rates...

Research Summary In corporate acquisitions, overconfident chief executive officers (CEOs) often make biased decisions, subsequently paying unjustifiably high acquisition premiums. We investigate the predeal process in which premium is decided upon and, drawing from procedural rationality theory, argue that pursuit of greater through slow-paced processes reduces tendency CEOs to inflate The empi...

one of the most important and well-recognized entrepreneurial decision making biases is overconfidence. overconfidence is by far the most famous entrepreneurial decision bias, overconfidence has been identified as one leading factor in entrepreneurial risky decisions, and it has been hypothesized and proved as one of the causes of entrepreneurial unprepared entry decisions and subsequent failur...

Although overconfidence is acknowledged as one of the most common managerial decision-making biases, much uncertainty remains about its implications for firm performance. To resolve this uncertainty, we investigate how and why CEO related to performance using meta-analytic techniques on a sample 199 studies. In particular, relying behavioral decision theory, develop alternative hypotheses regar...

Purpose: This study aims to determine the effect of acquisition company's managerial ability on performance after mergers and acquisitions. CEO overconfidence was added as a moderating in this study. The sample data include companies listed IDX that carried out corporate actions 2014-2018 period. Methodology: sampling technique used is purposive sampling, analysis method SPSS Smart PLS applicat...