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Cited by 3,669

The DOI matches its Crossref record; 12 of the 12 references it cites were found in a registry or an index.

CEO Overconfidence and Corporate Investment

Open access
MALMENDIER, ULRIKE, TATE, GEOFFREY·2005·The Journal of Finance
DOI 10.1111/j.1540-6261.2005.00813.x
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Abstract

We argue that managerial overconfidence can account for corporate investment distortions. Overconfident managers overestimate the returns to their investment projects and view external funds as unduly costly. Thus, they overinvest when they have abundant internal funds, but curtail investment when they require external financing. We test the overconfidence hypothesis, using panel data on personal portfolio and corporate investment decisions of Forbes 500 CEOs. We classify CEOs as overconfident if they persistently fail to reduce their personal exposure to company‐specific risk. We find that investment of overconfident CEOs is significantly more responsive to cash flow, particularly in equity‐dependent firms.

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Crossref · 10.1111/j.1540-6261.2005.00813.x

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Metadata

Authors
MALMENDIER, U., & TATE, G.
Venue
The Journal of Finance
Publisher
Wiley
Published
2005-11-10
Volume
60
Issue
6
Pages
2661-2700
ISSN
  • 0022-1082 (ISSN-L)
  • 1540-6261
DOI
10.1111/j.1540-6261.2005.00813.x
OpenAlex
W3123502919
Cited by
3,669
References
12
FWCI
214.32
Type
journal article
Language
en
Open access
bronze

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Bibliographic data: Semantic Scholar, OpenAlex, Crossref.

Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).

Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.