Better innovators or more innovators? Managerial overconfidence and corporate R&amp;D

Zavertiaeva, Marina; López‐Iturriaga, Félix J.; Kuminova, Evgeniia V.

doi:10.1002/mde.2917

Cited by 26 publications

(11 citation statements)

References 98 publications

(122 reference statements)

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“…Wang, Sutherland, Ning, Wang, and Pan (2018) suggest that overconfident managers show a strong level of “internal locus of controls” over corporate decision‐making. The positive impact of MO on R&D investments has been verified in Europe (e.g., Zavertiaeva, López‐Iturriaga, & Kuminova, 2018) and China (e.g., Wang et al, 2018). Vietnam is the only emerging country that we know little.…”

Section: Introductionmentioning

confidence: 94%

R&D investment and future firm performance: The role of managerial overconfidence and government ownership

et al. 2020

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We investigate the relationship among managerial overconfidence (MO), government ownership, and research and development (R&D) investment using data from Vietnamese public companies for the period 2007–2016. We also investigate how R&D investment, given MO and government ownership, affect future firm performance. Our results indicate that MO and government ownership are positively related to R&D investment. Conceptually, this study investigates novel factors affecting of R&D investment and their role in improving firm performance. Overall, this study emphasizes the importance of R&D investment in the corporate world, improving firm performance and, ultimately, economic prosperity.

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Section: Introductionmentioning

confidence: 94%

R&D investment and future firm performance: The role of managerial overconfidence and government ownership

et al. 2020

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“…The research results showed that there is a significant relationship between overconfidence and firm financial performance. Zavertiaeva et al (2018) study the influence of chief executive officers' overconfidence on corporate research and development (R&D). They find that overconfident managers not only spend more on R&D but also amplify the effect of financial determinants of R&D such as firm liquidity or profitability.…”

Section: Theoretical Framework and Hypotheses Developmentmentioning

confidence: 99%

The relationship between management characteristics and firm performance

Salehi

Moghadam

2019

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Purpose This study aims to investigate the relationship between management characteristics including management capability, management entrenchment, agency costs and overconfidence and firm performance in companies listed on the Tehran Stock Exchange market. Design/methodology/approach The research population includes 125 companies after applying systematic elimination sampling method during 2010-2016. The primary measure for companies’ performance is return on assets and Demerjian et al. (2012a) model is used to measure managerial characteristics. Findings The results indicated that two management characteristics, namely, management capability and overconfidence are positively associated with firm performance and improve the level of performance. Agency costs did not have any significant effect on firm performance and management entrenchment leads to deterioration in firm performance. Originality/value The paper focuses on managerial characteristics and firm performance, which the results may very helpful to companies and investors to hiring managers with specific characteristics. Moreover, the results may give strength to further studies.

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“…A higher value of financial performance is usually positively connected to managers' confidence under the existence of the "self-serving attribution bias," and managers will take responsibility of firms' success [45]. It is suggested that managers' confidence or overconfidence could result in high risk-taking decisions such as R and D actions [46]. In summary, a higher value of financial performance means more available resources and firms are prone to take more risks.…”

Section: Moderating Effect Of the Value Of Financial Performancementioning

confidence: 99%

Financial Performance Gaps and Corporate Social Responsibility

Deng

Long

2019

Sustainability

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Based on the behavioral theory of firm and prospect theory, we investigate how corporate social responsibility (CSR) activities will respond to underperformance in past and in future. Using samples of Chinese listed firms from 2011 to 2016, this paper found that CSR increases with the distance by which financial performance in the last year falls below goals and decreases with the distance by which expected financial performance will fall below targets. In addition, the future underperformance will weaken the effect of the past underperformance on CSR. Besides, the value of financial performance in the last year will weaken the impact of underperformance in the last year on CSR and strengthen the impact of underperformance in the next year on CSR. The findings suggest that future studies should take both value of financial performance and performance gaps into consideration to have a better understanding of organizational decisions and behaviors.

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Better innovators or more innovators? Managerial overconfidence and corporate R&D

Cited by 26 publications

References 98 publications

R&D investment and future firm performance: The role of managerial overconfidence and government ownership

R&D investment and future firm performance: The role of managerial overconfidence and government ownership

The relationship between management characteristics and firm performance

Financial Performance Gaps and Corporate Social Responsibility

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