Board Characteristics and Managerial Overconfidence in an Emerging Market

Shokrollah Khajavi and Golamreza Dehghani
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Shokrollah Khajavi: Department of Accounting, Faculty of Economics, Management and Social Sciences, Shiraz University, Iran
Golamreza Dehghani: M. A. of Accounting, Financial and Economic Deputy of Niroo Gostar Professional Group, Iran

International Journal of Economics and Financial Issues, 2016, vol. 6, issue 2, 529-537

Abstract: This research investigates the relationship between board characteristics and managerial overconfidence of 107 listed companies in Tehran Stock Exchange during 2006-2012. In addition, financial data of the year 2005 have been used to calculate research variables. Furthermore, in order to examine the hypotheses, the research uses pooled/panel regression and ML-binary logit model. Capital expenditure and overinvestment on assets criteria have been used to measure managerial overconfidence, and board size, board independence (BI) and CEO duality have been considered as board characteristics. The findings indicate that only BI has negative and significant effect on managerial overconfidence. Besides, firm age as control variable has a direct and significant effect on capital expenditure

Keywords: Board Size; Board Independence; CEO Duality; Managerial Overconfidence; Capital Expenditure; Overinvestment on Assets (search for similar items in EconPapers)
JEL-codes: D03 G32 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (5)

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