CEO Overconfidence and the Stock Performance following Private Placements
Date Issued
2014
Date
2014
Author(s)
Chen, Po-Han
Abstract
Nowadays, private placement becomes a common financing method in capital market, and there are increasing numbers of company using private placements to finance capital. Existing studies suggest that firms announcing private placements follow positive stock performance. Nevertheless, entrenchment effect which leads the negative announcement effect of private placements is supported in recent years. We note that private placements have not linked to CEO overconfidence in the prior literature. Therefore, in this study, we test if overconfident CEOs affect stock performance following private placements. In empirical results, we find that firms with overconfident CEO perform worse than those with rational CEOs when they announce private placements. However, no significant difference exists in firms with overconfident CEO.
Subjects
私募股權
壕溝效果
高階經理過度自信
Type
thesis
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