Executive overconfidence, corporate investment, and institutional ownership: Evidence from Vietnam

Tam Tran, Craig Wilson and Fan Yang

Emerging Markets Review, 2025, vol. 68, issue C

Abstract: Using Vietnamese data, we study how net-buyer executives (previously thought to identify overconfidence) affect corporate investment. We find that both net-buyer CEOs and net-buyer board chairs tend to increase corporate investment, which is mitigated by both domestic and state institutional ownership, and exacerbated by foreign institutional ownership. We find that net-buyer CEOs subsequently increase firm value, so they seem to have justified confidence in their ability to generate value, whereas net-buyer board chairs subsequently decrease firm value, displaying genuine overconfidence. As this distinction does not hold for dual board chair-CEOs, it could arise from information asymmetry between CEOs and chairs.

Keywords: Executive overconfidence; Institutional ownership; Corporate investment; Firm value; Information asymmetry (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:68:y:2025:i:c:s1566014125000780

DOI: 10.1016/j.ememar.2025.101329

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