Does overconfidence pay off when things go well?: CEO overconfidence, firm performance, and the business cycle

Autores
Reyes, Tomas; Vassolo, Roberto Santiago; Kausel, Edgar E.; Peña Torres, Diamela; Zhang, Stephen
Año de publicación
2020
Idioma
inglés
Tipo de recurso
artículo
Estado
versión publicada
Descripción
We investigate the moderating effect of the business cycle on the positive relationship between CEO overconfidence and firm performance. We propose that the expansion years of the business cycle enhance the positive impact of overconfident CEOs on firms’ performance. However, this effect is reduced during recession periods. We analyze the effect of CEO overconfidence on the Return on Equity of publicly listed US firms from 1992 to 2015, a period that includes the bursting of the dot-com bubble in 2001 and the Great Recession of 2008–2009. The empirical findings support the hypotheses that expansion periods increase the positive relationship between overconfident CEOs and firms’ performance, but this positive effect weakens during recessions.
Fil: Reyes, Tomas. Pontificia Universidad Católica de Chile; Chile
Fil: Vassolo, Roberto Santiago. Universidad Austral. Instituto de Altos Estudios; Argentina. Pontificia Universidad Católica de Chile; Chile. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina
Fil: Kausel, Edgar E.. Pontificia Universidad Católica de Chile; Chile
Fil: Peña Torres, Diamela. Pontificia Universidad Católica de Chile; Chile
Fil: Zhang, Stephen. University of Adelaide; Australia
Materia
BUSINESS CYCLE
CEO OVERCONFIDENCE
FIRM PERFORMANCE
RECESSIONS
Nivel de accesibilidad
acceso abierto
Condiciones de uso
https://creativecommons.org/licenses/by-nc-sa/2.5/ar/
Repositorio
CONICET Digital (CONICET)
Institución
Consejo Nacional de Investigaciones Científicas y Técnicas
OAI Identificador
oai:ri.conicet.gov.ar:11336/171209
Acceder
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network_acronym_str CONICETDig
repository_id_str 3498
network_name_str CONICET Digital (CONICET)
spelling Does overconfidence pay off when things go well?: CEO overconfidence, firm performance, and the business cycleReyes, TomasVassolo, Roberto SantiagoKausel, Edgar E.Peña Torres, DiamelaZhang, StephenBUSINESS CYCLECEO OVERCONFIDENCEFIRM PERFORMANCERECESSIONShttps://purl.org/becyt/ford/5.2https://purl.org/becyt/ford/5We investigate the moderating effect of the business cycle on the positive relationship between CEO overconfidence and firm performance. We propose that the expansion years of the business cycle enhance the positive impact of overconfident CEOs on firms’ performance. However, this effect is reduced during recession periods. We analyze the effect of CEO overconfidence on the Return on Equity of publicly listed US firms from 1992 to 2015, a period that includes the bursting of the dot-com bubble in 2001 and the Great Recession of 2008–2009. The empirical findings support the hypotheses that expansion periods increase the positive relationship between overconfident CEOs and firms’ performance, but this positive effect weakens during recessions.Fil: Reyes, Tomas. Pontificia Universidad Católica de Chile; ChileFil: Vassolo, Roberto Santiago. Universidad Austral. Instituto de Altos Estudios; Argentina. Pontificia Universidad Católica de Chile; Chile. Consejo Nacional de Investigaciones Científicas y Técnicas; ArgentinaFil: Kausel, Edgar E.. Pontificia Universidad Católica de Chile; ChileFil: Peña Torres, Diamela. Pontificia Universidad Católica de Chile; ChileFil: Zhang, Stephen. University of Adelaide; AustraliaSAGE Publications2020-06-24info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionhttp://purl.org/coar/resource_type/c_6501info:ar-repo/semantics/articuloapplication/pdfapplication/pdfhttp://hdl.handle.net/11336/171209Reyes, Tomas; Vassolo, Roberto Santiago; Kausel, Edgar E.; Peña Torres, Diamela; Zhang, Stephen; Does overconfidence pay off when things go well?: CEO overconfidence, firm performance, and the business cycle; SAGE Publications; Strategic Organization; 20; 3; 24-6-2020; 510-5401476-12701741-315XCONICET DigitalCONICETenginfo:eu-repo/semantics/altIdentifier/url/http://journals.sagepub.com/doi/10.1177/1476127020930659info:eu-repo/semantics/altIdentifier/doi/10.1177/1476127020930659info:eu-repo/semantics/openAccesshttps://creativecommons.org/licenses/by-nc-sa/2.5/ar/reponame:CONICET Digital (CONICET)instname:Consejo Nacional de Investigaciones Científicas y Técnicas2025-09-29T09:43:48Zoai:ri.conicet.gov.ar:11336/171209instacron:CONICETInstitucionalhttp://ri.conicet.gov.ar/Organismo científico-tecnológicoNo correspondehttp://ri.conicet.gov.ar/oai/requestdasensio@conicet.gov.ar; lcarlino@conicet.gov.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:34982025-09-29 09:43:49.194CONICET Digital (CONICET) - Consejo Nacional de Investigaciones Científicas y Técnicasfalse
dc.title.none.fl_str_mv Does overconfidence pay off when things go well?: CEO overconfidence, firm performance, and the business cycle
title Does overconfidence pay off when things go well?: CEO overconfidence, firm performance, and the business cycle
spellingShingle Does overconfidence pay off when things go well?: CEO overconfidence, firm performance, and the business cycle
Reyes, Tomas
BUSINESS CYCLE
CEO OVERCONFIDENCE
FIRM PERFORMANCE
RECESSIONS
title_short Does overconfidence pay off when things go well?: CEO overconfidence, firm performance, and the business cycle
title_full Does overconfidence pay off when things go well?: CEO overconfidence, firm performance, and the business cycle
title_fullStr Does overconfidence pay off when things go well?: CEO overconfidence, firm performance, and the business cycle
title_full_unstemmed Does overconfidence pay off when things go well?: CEO overconfidence, firm performance, and the business cycle
title_sort Does overconfidence pay off when things go well?: CEO overconfidence, firm performance, and the business cycle
dc.creator.none.fl_str_mv Reyes, Tomas
Vassolo, Roberto Santiago
Kausel, Edgar E.
Peña Torres, Diamela
Zhang, Stephen
author Reyes, Tomas
author_facet Reyes, Tomas
Vassolo, Roberto Santiago
Kausel, Edgar E.
Peña Torres, Diamela
Zhang, Stephen
author_role author
author2 Vassolo, Roberto Santiago
Kausel, Edgar E.
Peña Torres, Diamela
Zhang, Stephen
author2_role author
author
author
author
dc.subject.none.fl_str_mv BUSINESS CYCLE
CEO OVERCONFIDENCE
FIRM PERFORMANCE
RECESSIONS
topic BUSINESS CYCLE
CEO OVERCONFIDENCE
FIRM PERFORMANCE
RECESSIONS
purl_subject.fl_str_mv https://purl.org/becyt/ford/5.2
https://purl.org/becyt/ford/5
dc.description.none.fl_txt_mv We investigate the moderating effect of the business cycle on the positive relationship between CEO overconfidence and firm performance. We propose that the expansion years of the business cycle enhance the positive impact of overconfident CEOs on firms’ performance. However, this effect is reduced during recession periods. We analyze the effect of CEO overconfidence on the Return on Equity of publicly listed US firms from 1992 to 2015, a period that includes the bursting of the dot-com bubble in 2001 and the Great Recession of 2008–2009. The empirical findings support the hypotheses that expansion periods increase the positive relationship between overconfident CEOs and firms’ performance, but this positive effect weakens during recessions.
Fil: Reyes, Tomas. Pontificia Universidad Católica de Chile; Chile
Fil: Vassolo, Roberto Santiago. Universidad Austral. Instituto de Altos Estudios; Argentina. Pontificia Universidad Católica de Chile; Chile. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina
Fil: Kausel, Edgar E.. Pontificia Universidad Católica de Chile; Chile
Fil: Peña Torres, Diamela. Pontificia Universidad Católica de Chile; Chile
Fil: Zhang, Stephen. University of Adelaide; Australia
description We investigate the moderating effect of the business cycle on the positive relationship between CEO overconfidence and firm performance. We propose that the expansion years of the business cycle enhance the positive impact of overconfident CEOs on firms’ performance. However, this effect is reduced during recession periods. We analyze the effect of CEO overconfidence on the Return on Equity of publicly listed US firms from 1992 to 2015, a period that includes the bursting of the dot-com bubble in 2001 and the Great Recession of 2008–2009. The empirical findings support the hypotheses that expansion periods increase the positive relationship between overconfident CEOs and firms’ performance, but this positive effect weakens during recessions.
publishDate 2020
dc.date.none.fl_str_mv 2020-06-24
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
http://purl.org/coar/resource_type/c_6501
info:ar-repo/semantics/articulo
format article
status_str publishedVersion
dc.identifier.none.fl_str_mv http://hdl.handle.net/11336/171209
Reyes, Tomas; Vassolo, Roberto Santiago; Kausel, Edgar E.; Peña Torres, Diamela; Zhang, Stephen; Does overconfidence pay off when things go well?: CEO overconfidence, firm performance, and the business cycle; SAGE Publications; Strategic Organization; 20; 3; 24-6-2020; 510-540
1476-1270
1741-315X
CONICET Digital
CONICET
url http://hdl.handle.net/11336/171209
identifier_str_mv Reyes, Tomas; Vassolo, Roberto Santiago; Kausel, Edgar E.; Peña Torres, Diamela; Zhang, Stephen; Does overconfidence pay off when things go well?: CEO overconfidence, firm performance, and the business cycle; SAGE Publications; Strategic Organization; 20; 3; 24-6-2020; 510-540
1476-1270
1741-315X
CONICET Digital
CONICET
dc.language.none.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv info:eu-repo/semantics/altIdentifier/url/http://journals.sagepub.com/doi/10.1177/1476127020930659
info:eu-repo/semantics/altIdentifier/doi/10.1177/1476127020930659
dc.rights.none.fl_str_mv info:eu-repo/semantics/openAccess
https://creativecommons.org/licenses/by-nc-sa/2.5/ar/
eu_rights_str_mv openAccess
rights_invalid_str_mv https://creativecommons.org/licenses/by-nc-sa/2.5/ar/
dc.format.none.fl_str_mv application/pdf
application/pdf
dc.publisher.none.fl_str_mv SAGE Publications
publisher.none.fl_str_mv SAGE Publications
dc.source.none.fl_str_mv reponame:CONICET Digital (CONICET)
instname:Consejo Nacional de Investigaciones Científicas y Técnicas
reponame_str CONICET Digital (CONICET)
collection CONICET Digital (CONICET)
instname_str Consejo Nacional de Investigaciones Científicas y Técnicas
repository.name.fl_str_mv CONICET Digital (CONICET) - Consejo Nacional de Investigaciones Científicas y Técnicas
repository.mail.fl_str_mv dasensio@conicet.gov.ar; lcarlino@conicet.gov.ar
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score 13.070432

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