Is an overconfident CEO good for advertising investments?

Ying-Jiuan Wong and Chi-Feng Wang
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Ying-Jiuan Wong: Department of Business Administration, National Kaohsiung University of Applied Sciences, Kaohsiung, Taiwan
Chi-Feng Wang: Department of International Business, National Kaohsiung University of Applied Sciences, Kaohsiung, Taiwan

Australian Journal of Management, 2018, vol. 43, issue 3, 439-455

Abstract: In this study, we identify a link between CEO overconfidence and advertising investments by examining the specific impact overconfident CEOs have on stock market responses to new TV commercial announcements. Furthermore, we investigate whether family ownership moderates this relationship. Our results reveal a negative correlation between CEO overconfidence and stock market performance, and that family ownership magnifies this negative relationship. Our study thus highlights the role CEOs’ personal attributes have on influencing investors’ assessments of corporate advertising investments and reveals there is a potential for family ownership to intensify this negative relationship between CEO overconfidence and the market value of new advertising investments.

Keywords: Advertising investment; CEO overconfidence; family ownership; stock market reaction (search for similar items in EconPapers)
JEL-codes: M12 M37 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ausman:v:43:y:2018:i:3:p:439-455

DOI: 10.1177/0312896217733307

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