 The effect of managerial overconfidence on the market timing ability and post-buyback performance of open market repurchasesAnlin Chen and Cheng-Shou Lu The North American Journal of Economics and Finance, 2015, vol. 33, issue C, 234-251 Abstract: This paper investigates whether managerial overconfidence has an adverse impact on the market timing ability and post-buyback performance of open market repurchases, and whether corporate governance can mitigate the adverse impact in Taiwan. We find that managerial overconfidence raises the repurchase cost implying an adverse impact on the market timing ability of share repurchases. The repurchasing firms with overconfident managers experience poorer short-run announcement return and long-run stock performance than those without overconfident managers because of the poorer market timing ability and the higher repurchase cost. However, corporate governance mitigates the adverse impacts of managerial overconfidence on the market timing ability and post-buyback performance of repurchases. Keywords: Corporate governance; Managerial overconfidence; Market timing; Open market repurchase; Post-buyback performance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:33:y:2015:i:c:p:234-251 DOI: 10.1016/j.najef.2015.05.001 Access Statistics for this article The North American Journal of Economics and Finance is currently edited by Hamid Beladi More articles in The North American Journal of Economics and Finance from Elsevier |
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