{"title":"Overconfidence, management and firm value","authors":"Cuifeng Wu, Kunyue Zhang","doi":"10.1145/3512676.3512692","DOIUrl":null,"url":null,"abstract":"In practice, people are not as rational as the supposed to be in the perfect market. They are irrational when they are making decisions. This phenomenon is also exist in listed companies. Managers who are the main decision makers are found to be overconfident. What is the impact of manager overconfidence on the value of the company? This paper uses the sample data of Chinese A-share listed companies from 2000 to 2017 to examine the research hypothesis, empirical results show that manager overconfidence has a significant negative impact on the enterprise value. Finally, based on the conclusion of the research on the effect of manager overconfidence on the value of the company, this paper puts forward the relevant policy suggestions for promoting the value of listed companies.","PeriodicalId":281300,"journal":{"name":"Proceedings of the 2022 5th International Conference on Computers in Management and Business","volume":"76 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2022-01-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Proceedings of the 2022 5th International Conference on Computers in Management and Business","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1145/3512676.3512692","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
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Abstract
In practice, people are not as rational as the supposed to be in the perfect market. They are irrational when they are making decisions. This phenomenon is also exist in listed companies. Managers who are the main decision makers are found to be overconfident. What is the impact of manager overconfidence on the value of the company? This paper uses the sample data of Chinese A-share listed companies from 2000 to 2017 to examine the research hypothesis, empirical results show that manager overconfidence has a significant negative impact on the enterprise value. Finally, based on the conclusion of the research on the effect of manager overconfidence on the value of the company, this paper puts forward the relevant policy suggestions for promoting the value of listed companies.
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