Abstract
In this study, we examine the links between CEO overconfidence, the speed of adjustment (SOA) of cash holdings, and firm value for listed US firms, finding a positive effect of CEO overconfidence on SOA. We address endogeneity concerns using a difference-in-differences approach, propensity score matching, and entropy balancing. Our results are robust to the use of alternative estimation methods. Finally, we conclude that financial constraints, leverage, and corporate governance quality affect the relation between CEO overconfidence and the SOA of cash holdings.
| Original language | English |
|---|---|
| Pages (from-to) | 202-229 |
| Number of pages | 28 |
| Journal | The European Journal of Finance |
| Volume | 31 |
| Issue number | 2 |
| Early online date | 12 Jun 2024 |
| DOIs | |
| Publication status | Published - 22 Jan 2025 |
Bibliographical note
Publisher Copyright:© 2024 Informa UK Limited, trading as Taylor & Francis Group.
Funder
The research reported in this paper was partially funded by the Spanish State Research Agency (AEI/10.13039/50110 0 011033) [grant number PID2020-115982RB-C22].Funding
The research reported in this paper was partially funded by the Spanish State Research Agency (AEI/10.13039/50110 0 011033) [grant number PID2020-115982RB-C22].
| Funders | Funder number |
|---|---|
| Spanish State Research Agency | AEI/10.13039/50110 0 011033, PID2020-115982RB-C22 |
Keywords
- CEO overconfidence
- Cash holdings
- corporate governance
- financial constraints
- leverage
- speed of adjustment
ASJC Scopus subject areas
- Economics, Econometrics and Finance (miscellaneous)