Asset Details
Do you wish to reserve the book?
Managerial Overconfidence, Self-Attribution Bias, and Downwardly Sticky Investment: Evidence from Korea
Hey, we have placed the reservation for you!
By the way, why not check out events that you can attend while you pick your title.
Oops! Something went wrong.
Looks like we were not able to place the reservation. Kindly try again later.
Are you sure you want to remove the book from the shelf?
Managerial Overconfidence, Self-Attribution Bias, and Downwardly Sticky Investment: Evidence from Korea
Do you wish to request the book?
Managerial Overconfidence, Self-Attribution Bias, and Downwardly Sticky Investment: Evidence from Korea
Please be aware that the book you have requested cannot be checked out. If you would like to checkout this book, you can reserve another copy
We have requested the book for you!
Your request is successful and it will be processed during the Library working hours. Please check the status of your request in My Requests.
Oops! Something went wrong.
Looks like we were not able to place your request. Kindly try again later.
Journal Article
Managerial Overconfidence, Self-Attribution Bias, and Downwardly Sticky Investment: Evidence from Korea
2018
Overview
The extant literature on behavioral corporate finance has explored the effects of overconfidence on investment-cash flow sensitivity (ICS) to explain overinvestment, yet it has overlooked the asymmetric behavior of investments in relation to changes in cash flow levels. This study examines whether investments behave asymmetrically responding to changes in cash flows and, if so, how managerial overconfidence affects asymmetric ICS. Using a sample of KOSPI and KOSDAQ firms in Korea, we find the incidence of downwardly sticky ICS in unconstrained firms. We then find that overconfident managers encourage ICS to be stickier than their rational peers do in unconstrained firms. Finally, we find that managerial overconfidence intensified by self-attribution bias induces ICS to get even stickier, suggesting more explicit evidence of corporate investment distortions. The results of alternative tests using the asymmetric models of Homburg and Nasev (2008) are qualitatively consistent with prior results. Overall, our findings imply a higher incidence of excessive investment commitments driven by overconfident managers.
Publisher
Routledge,Taylor & Francis, Ltd,Taylor & Francis Ltd
