Are Overconfident CEOs Better Innovators?

David Hirshleifer, Angie Low and Siew Hong Teoh

MPRA Paper from University Library of Munich, Germany

Abstract: Using options- and press-based proxies for CEO overconfidence (Malmendier and Tate 2005a, 2005b, 2008), we find that over the 1993-2003 period, firms with overconfident CEOs have greater return volatility, invest more in innovation, obtain more patents and patent citations, and achieve greater innovative success for given research and development (R&D) expenditure. Overconfident managers only achieve greater innovation than non-overconfident managers in innovative industries. Overconfidence is not associated with lower sales, ROA, or Q.

Keywords: CEO Overconfidence; Innovation; R&D; Patent (search for similar items in EconPapers)
JEL-codes: G30 M40 M52 (search for similar items in EconPapers)
Date: 2010-04-29
New Economics Papers: this item is included in nep-bec, nep-cbe, nep-ino and nep-knm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Journal Article: Are Overconfident CEOs Better Innovators? (2012)
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