CEO Overconfidence as a Driver of R&D Intensity: Market Competition’s Catalytic Role in Chinese Listed Firms

Zhihan Cao () and Zexi Liao
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Zhihan Cao: City University of Macau, Faculty of Business
Zexi Liao: Guangzhou College of Commerce, School of Economics

A chapter in Proceedings of the 2025 International Conference on Financial Innovation and Marketing Management (FIMM 2025), 2025, pp 1171-1182 from Springer

Abstract: Abstract In the context of national ideation-driven strategies, corporate R&D expenditure emerges as a pivotal driver for enhancing national competitiveness and sustainable corporate growth. However, prior studies predominantly adopt agency theory and executive characteristic lenses, lacking consensus on how irrational traits (e.g., overconfidence) shape innovative investment decisions. Consequently, this paper investigates the relationship between CEO overconfidence and corporate Ideation expenditure using data from China’s A-share listed companies. This paper selects data from A-share listed companies spanning 2014 to 2023 as the sample to verify the impact of CEO overconfidence on the intensity of corporate ideation investment. The findings reveal that CEOs, as the core decision-makers of corporate strategy, significantly Amplify corporate ideation investment through their overconfidence. Industry competition exacerbates the promoting impact of overconfident CEOs on R&D spending. This paper provides practical approaches for improving C-suite hiring and ideation-linked remuneration schemes in addition to enhancing the theoretical framework at the nexus of behavioral finance and ideation management.

Keywords: CEO overconfidence; Corporate ideation investment; Industry competition (search for similar items in EconPapers)
Date: 2025
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DOI: 10.2991/978-94-6463-874-5_134

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