Full Citation

Title: Are overconfident CEOs better leaders? Evidence from stakeholder commitments

Citation Type: Journal Article

Publication Year: 2018

ISBN:

ISSN: 0304405X

DOI: 10.1016/j.jfineco.2017.12.008

NSFID:

PMCID:

PMID:

Abstract: We find evidence that the leadership of overconfident chief executive officers (CEOs) induces stakeholders to take actions that contribute to the leader's vision. By being intentionally overexposed to the idiosyncratic risk of their firms, overconfident CEOs exhibit a strong belief in their firms’ prospects. This belief attracts suppliers beyond the firm's observable expansionary corporate activities. Overconfident CEOs induce more supplier commitments including greater relationship-specific investment and longer relationship duration. Overconfident CEOs also induce stronger labor commitments as employees exhibit lower turnover rates and greater ownership of company stock in benefit plans.

Url: https://www.sciencedirect.com/science/article/pii/S0304405X17303197

Url: https://linkinghub.elsevier.com/retrieve/pii/S0304405X17303197

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Authors: Phua, Kenny; Tham, T. Mandy; Wei, Chishen

Periodical (Full): Journal of Financial Economics

Issue: 3

Volume: 127

Pages: 519-545

Data Collections: IPUMS USA

Topics: Other

Countries: United States