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Overconfidence and Early-life Experiences: The Impact of Managerial Traits on Corporate Financial Policies
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This article found that managers who believe that their firm is undervalued view external financing as overpriced, especially equity, and use less external finance and, conditional on accessing risky capital, issue less equity than their peers.Abstract:
We show that measurable managerial characteristics have significant explanatory power for corporate financing decisions beyond traditional capital-structure determinants First, managers who believe that their firm is undervalued view external financing as overpriced, especially equity Such overconfident managers use less external finance and, conditional on accessing risky capital, issue less equity than their peers Second, CEOs with Depression experience are averse to debt and lean excessively on internal finance Third, CEOs with military experience pursue more aggressive policies, including heightened leverage Complementary measures of CEO traits based on press portrayals confirm the resultsread more
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Managers’ loss aversion and firm debt financing: Some insights from Vietnamese SMEs
Huong Trang Kim,Quang Nguyen +1 more
TL;DR: In this paper, a lab-in-the-field experiment with a sample of top managers from 320 textile and garment SMEs in Vietnam was carried out to examine whether managers' loss aversion has significant impact on debt financing behavior of SMEs.
Journal ArticleDOI
Are CEOs More Likely to Be First-Borns?
TL;DR: In this paper, the authors investigate the link between birth order and the career outcome of becoming chief executive officer (CEO) of a company and find that male and female CEOs are more likely to be first-born.
Journal ArticleDOI
A new framework for an efficient ticket booking scheme based on mechanism design
TL;DR: In this paper with the use of mechanism design framework some elegant alternative solutions are proposed so that it could outperform the earlier FCFS scheme both from the view of profit making and efficiency in allocation.
Journal ArticleDOI
In retrospect: The influence of chief executive officers’ historical relative pay on overconfidence:
Daniel Jinyong Zyung,Wei Shi +1 more
TL;DR: In this article, the authors posit that chief executive officers who have received over their tenure a greater sum of total compensation relative to the market's going rate become overconfident, and they posit that this makes them more likely to make mistakes.
Proceedings ArticleDOI
CEO Overconfidence in Real Estate Markets: A Curse or A Blessing?
Helen X. H. Bao,Haotong Li +1 more
TL;DR: In this paper, the influence of CEO overconfidence on firms' financial performance and corporate social responsibility (CSR) in the US real estate investment trust (REIT) market was studied.
References
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Journal Article
The Cost of Capital, Corporation Finance and the Theory of Investment
TL;DR: In this article, the effect of financial structure on market valuations has been investigated and a theory of investment of the firm under conditions of uncertainty has been developed for the cost-of-capital problem.
Posted Content
What Do We Know About Capital Structure? Some Evidence from International Data
Raghuram G. Rajan,Raghuram G. Rajan,Raghuram G. Rajan,Luigi Zingales,Luigi Zingales,Luigi Zingales +5 more
TL;DR: In this paper, the authors investigate the determinants of capital structure choice by analyzing the financing decisions of public firms in the major industrialized countries and find that factors identified by previous studies as important in determining the cross-section of the capital structure in the U.S. affect firm leverage in other countries as well.
Journal ArticleDOI
Unrealistic optimism about future life events
TL;DR: In this article, the authors investigated the tendency of people to be unrealistically optimistic about future life events and found that degree of desirability, perceived probability, personal experience, perceived controllability, and stereotype saliency would influence the amount of optimistic bias evoked by different events.
Journal ArticleDOI
The Hubris Hypothesis of Corporate Takeovers
TL;DR: The hubris hypothesis is advanced as an explanation of corporate takeovers by Jensen and Ruback as mentioned in this paper, who argued that the evidence supports the hubris hypotheses as much as it supports other explanations such as taxes, synergy, and inefficient target management.
Journal ArticleDOI
Debt and taxes
TL;DR: Miller et al. as discussed by the authors presented a paper on the thirty-fiveth annual meeting of the American Finance Association, Atlantic City, New Jersey, September 16-18, 1976 (May, 1977), pp. 261-275.