Managerial overconfidence and corporate overinvestment

摘要

Focusing on behavioral corporate finance, we argue that personal characteristics of chief executive officers, in particular overconfidence, can account for the widespread distortion of overinvestment in China. Based on the data of Chinese listed companies from 2004–2008, we study the relationship between managerial overconfidence and corporate overinvestment. The main result is that managerial overconfidence has a significant positive influence on corporate overinvestment.