CEO Overconfidence and Corporate Investment

By Ulrike Malmendier, Geoffrey A. Tate. 2005

3,893 citations recorded by the source corpus.

View Paper: https://www.semanticscholar.org/paper/7142157547fda68f82174b9e4b315087399fb596

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Citations in the corpus

Nudging and Boosting: Steering or Empowering Good Decisions (2017, background): “…fact that even experts—in business, medicine, and politics (e.g., Bornstein & Emler, 2001; Heath, Larrick, & Klayman, 1998; Kahneman & Renshon, 2007; Malmendier & Tate, 2005; Norman & Eva, 2010)—fall prey to cognitive illusions suggests that even rich learning opportunities do not equip people to…”
Who are the active investors? Evidence from venture capital (2008, result): “Note that this constitutes a new result in the venture capital literature, which is also consistent with the recent findings of Masulis and Nahata (2007). In addition we find that VC-SIZE typically has a statistically insignificant coefficient, suggesting that larger venture firms do not behave sign”
Family ownership, financing constraints and investment decisions (2011, positive): “Malmendier and Tate (2005) propose another agency-cost-related explanation for positive investment–cash flow sensitivities by relating corporate investment to CEO characteristics.”
Overvaluation and Earnings Management (2009, positive): “Overinvesting and acquisitions can occur even when the manager does not realize the overvaluation, either because he has strong hubris (Roll, 1986), he is overconfident (Malmendier and Tate, 2005), or he is overly optimistic (Heaton, 2002).”
The toxic triangle: Destructive leaders, susceptible followers, and conducive environments. (2007, background): “Narcissism has also been linked to overreach in business—making ill-advised acquisitions of firms in unrelated sectors and paying more than market value to acquire them (Hayward & Hambrick, 1997; Malmendier & Tate, 2005 ).”
Executives' “off-the-job” behavior, corporate culture, and financial reporting risk (2015, positive): “Malmendier and Tate (2008; 2005) find that over-confident CEOs are more likely to engage in value-destroying mergers and acquisitions (M&A) and link overconfidence to corporate investment decisions.”
CEO Overconfidence and Corporate Debt Maturity (2016, positive): “(2011) conclude that a dummy variable proxy, labeled Longholder, in Malmendier and Tate (2005), (2008) is the best candidate to replicate the option-based measure of overconfidence using more recent data.”
Unrealistic Expectations and Misguided Learning (2018, positive): “…their likelihood of having Huntington's disease (Oster, Shoulson and Dorsey, 2013), that unemployed individuals overestimate their likelihood of finding a job (Spinnewijn, 2012), and that some CEOs are overoptimistic regarding the future performance of their firms (Malmendier and Tate, 2005).”
The Dark Side of Leadership: Towards a Mid‐Range Theory of Hubris and Greed in Entrepreneurial Contexts (2015, positive): “Such actions in corporate settings are related to managerial overconfidence in the ability to control outcomes (Malmendier and Tate, 2005).”
Not so Above Average After All: When People Believe They are Worse than Average and its Implications for Theories of Bias in Social Comparison (2007, positive): “The claim that managers believe they are better than others has been used to explain the high rate of corporate merger and acquisition (Malmendier & Tate, 2005).”
Are Overconfident CEOs Better Leaders? Evidence from Stakeholder Commitments (2017, neutral): “This is an ideal test setting because their voluntary cooperation 1 For example, see Malmendier and Tate (2005, 2008), Billet and Qian (2008), Kolasinski and Li (2013), Schrand and Zechman (2012), Ahmed and Duellman (2013), Banerjee,…”
CEO Overconfidence and Stock Price Crash Risk (2016, positive): “Moreover, the overconfident CEO who handpicks the investment projects believes that he has the ability to control their outcome and underestimates the likelihood of failure (Malmendier and Tate 2005).”