Are overconfident CEOs better leaders? Evidence from stakeholder commitments

Phua, K; Tham, TM; Wei, C

Are overconfident CEOs better leaders? Evidence from stakeholder commitments

Phua, K Tham, TM Wei, C

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Publisher:: Elsevier BV
Publication Type:: Journal Article
Citation:: Journal of Financial Economics, 2018, 127, (3), pp. 519-545
Issue Date:: 2018-03-01

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Field	Value	Language
dc.contributor.author	Phua, K
dc.contributor.author	Tham, TM
dc.contributor.author	Wei, C
dc.date.accessioned	2022-08-29T05:43:37Z
dc.date.available	2022-08-29T05:43:37Z
dc.date.issued	2018-03-01
dc.identifier.citation	Journal of Financial Economics, 2018, 127, (3), pp. 519-545
dc.identifier.issn	0304-405X
dc.identifier.uri	http://hdl.handle.net/10453/161030
dc.description.abstract	We find evidence that the leadership of overconfident chief executive officers (CEOs) induces stakeholders to take actions that contribute to the leader's vision. By being intentionally overexposed to the idiosyncratic risk of their firms, overconfident CEOs exhibit a strong belief in their firms’ prospects. This belief attracts suppliers beyond the firm's observable expansionary corporate activities. Overconfident CEOs induce more supplier commitments including greater relationship-specific investment and longer relationship duration. Overconfident CEOs also induce stronger labor commitments as employees exhibit lower turnover rates and greater ownership of company stock in benefit plans.
dc.language	en
dc.publisher	Elsevier BV
dc.relation.ispartof	Journal of Financial Economics
dc.relation.isbasedon	10.1016/j.jfineco.2017.12.008
dc.rights	info:eu-repo/semantics/closedAccess
dc.subject	1402 Applied Economics, 1502 Banking, Finance and Investment, 1606 Political Science
dc.subject.classification	Finance
dc.title	Are overconfident CEOs better leaders? Evidence from stakeholder commitments
dc.type	Journal Article
utslib.citation.volume	127
utslib.for	1402 Applied Economics
utslib.for	1502 Banking, Finance and Investment
utslib.for	1606 Political Science
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Finance Discipline
utslib.copyright.status	closed_access	*
dc.date.updated	2022-08-29T05:43:36Z
pubs.issue	3
pubs.publication-status	Published
pubs.volume	127
utslib.citation.issue	3

Abstract:

We find evidence that the leadership of overconfident chief executive officers (CEOs) induces stakeholders to take actions that contribute to the leader's vision. By being intentionally overexposed to the idiosyncratic risk of their firms, overconfident CEOs exhibit a strong belief in their firms’ prospects. This belief attracts suppliers beyond the firm's observable expansionary corporate activities. Overconfident CEOs induce more supplier commitments including greater relationship-specific investment and longer relationship duration. Overconfident CEOs also induce stronger labor commitments as employees exhibit lower turnover rates and greater ownership of company stock in benefit plans.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/161030