Overconfidence or competence? Your employees know

Kim, Jonghwan (Simon), Heung-Jae Jeon and Grace Goun Kim

Economics Letters, 2022, vol. 216, issue C

Abstract: We examine the moderating effect of employees’ ratings of their CEOs on the relation between CEO overconfidence and firm value. Obtaining the employees’ CEO approval data from Glassdoor, we test the hypothesis that CEO overconfidence with a high approval rating is associated with higher Tobin’s Q. Our finding supports the hypothesis and suggests that employees can tell the type of CEO overconfidence (competence-based vs. mere optimism-based).

Keywords: Overconfidence; Tobin’s Q; Competence; Employee rating; CEO approval (search for similar items in EconPapers)
JEL-codes: G10 M20 M50 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:216:y:2022:i:c:s0165176522001707

DOI: 10.1016/j.econlet.2022.110580

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