Negative performance feedback and corporate venture capital: The moderating effect of CEO overconfidence

Wan, Liangyong; Li, Rui; Chen, Yujiao

doi:10.1080/00036846.2021.1982133

Cited by 10 publications

(9 citation statements)

References 35 publications

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“…Overconfidence, one of the most important behavioural biases, moderates the association between financial literacy and investment decisions. Wan et al (2022) also found that overconfidence is a moderator in investment decisions. Pikulina et al (2017) noted that overconfidence makes financially literate investors more enthusiastic about investments, leading to risks being taken to generate high returns.…”

Section: Overconfidence and Investment Decisionsmentioning

confidence: 86%

“…However, overconfidence does not always need to generate wrong financial decisions. Wan et al (2022) argued that overconfidence encourages risk-prone investment, which can lead to higher returns. An aggressive and overconfident trader may achieve more benefits than a slow-moving trader.…”

Section: Overconfidence and Investment Decisionsmentioning

confidence: 99%

“…A study conducted on students with economics degrees and investment experience revealed that confidence amongst the students was higher than their actual knowledge, and most students believed that they were better than others in relation to financial literacy. Professional managers and investors have more knowledge than students, but they are still overconfident in their investment decisions (Wan et al, 2022). When financially literate individuals are overconfident, their investment decisions are impacted.…”

Section: Overconfidence and Investment Decisionsmentioning

confidence: 99%

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The roles of financial literacy and overconfidence in investment decisions in Saudi Arabia

2022

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Financial literacy has gained much attention amongst scholars, policymakers and other stakeholders due to its role in backing up investment decisions, improving personal financial management and increasing financial wellbeing. This study examines the influence of financial literacy on investment decisions with the moderating effect of the overconfidence behavioural bias. Data were collected from 180 respondents in Saudi Arabia using a questionnaire, and a convenience sampling technique was applied. The study’s findings were analysed using the partial least squares structural equation modelling (PLS-SEM) technique. It was found that financial literacy positively and significantly influenced investment decisions. Moreover, the results show that overconfidence positively affected investment decisions and that the relationship between financial literacy and investment decisions was positively and significantly moderated by overconfidence.

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Section: Overconfidence and Investment Decisionsmentioning

confidence: 86%

Section: Overconfidence and Investment Decisionsmentioning

confidence: 99%

Section: Overconfidence and Investment Decisionsmentioning

confidence: 99%

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The roles of financial literacy and overconfidence in investment decisions in Saudi Arabia

2022

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“…Because male managers have more aggressive venture capital preferences than female managers, and analyst tracking can moderate irrational behaviors caused by overconfidence ( Valaskova et al, 2021 ). Wan et al (2022) focused on the relationship between overconfidence and overinvestment under different property rights. The argument shows that many of the investment expansion activities of private enterprises are caused by the overconfidence of managers, which is related to the more restrictions on investment and the greater social responsibility of state-owned enterprises.…”

Section: Literature Reviewmentioning

confidence: 99%

Analysis of the influence of enterprise managers’ overconfidence on the overinvestment behavior of listed companies under the media reports

2022

Front. Psychol.

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At present, there is a common overinvestment behavior among listed companies in various countries, which seriously reduces the overall resource allocation efficiency of the market. With the rise of behavioral finance, it has become a new direction to study the influence of managers’ “irrational characteristics” on enterprise overinvestment. With the rapid rise of the media industry, media reporting, as an external governance mechanism, supplements the capital market supervision system and has a huge impact on the investment behavior of enterprises. How media reports affects overinvestment and whether it can curb overinvestment caused by managers’ overconfidence is still worthy of further study. This paper took 6,012 A-share listed companies from 2013 to 2021 as samples, and based on the perspective of “media reports,” studies the impact of managers’ overconfidence on overinvestment; explores whether positive and negative media reports have a moderating effect between overconfidence and overinvestment; studies the moderating effect of media reports under different marketization processes. Empirical conclusions: (1) Managers’ overconfidence will lead to overinvestment of enterprises. (2) Positive media reports will aggravate the overinvestment caused by managers’ overconfidence; negative reports can inhibit the overinvestment caused by managers’ overconfidence. (3) In regions with higher marketization, positive media reports play a more significant role in aggravating overconfidence and leading to overinvestment; in regions with lower marketization, negative reports play a stronger role in restraining overconfidence and overinvestment.

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“…Decision-makers are driven by the psychological need to affirm themselves and avoid negative assessments to maintain their reputation and image. Decisionmakers regard the feedback status of historical performance surplus of enterprises and industry performance shortfall in a positive way, which leads to the strategic rigidity of enterprises and is not conducive for the breakthrough innovation of enterprises (Audia et al, 2015;Wan et al, 2022).…”

Section: Multiple Performance Feedback and Enterprises' Exploratory I...mentioning

confidence: 99%

Impact of multiple performance feedback and regional institutional development on enterprises’ exploratory innovation

Fu²

2022

Front. Psychol.

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With the increasing uncertainty in the external environment, exploratory innovation has gradually become the key path for enterprises to obtain core competitiveness and achieve sustainable growth. According to the behavioral theory of the firm, performance feedback is an essential driving factor affecting corporate innovation decisions. However, previous studies have ignored the consistency or inconsistency between historical and industry performance feedback, and its impact on exploratory innovation. Based on the data of Chinese companies listed from 2008 to 2019, this paper explores the impact of consistency and inconsistency between historical and industry performance feedback on enterprises’ exploratory innovation. In the cases of consistency, this study finds that the scenario of historical performance shortfall-industry performance shortfall is more likely to promote enterprises’ exploratory innovation than the industry performance surplus-historical performance surplus; in the cases of inconsistency, compared with historical performance surplus-industry performance shortfall, the scenario of historical performance shortfall-industry performance surplus is more likely to promote enterprises’ exploratory innovation. Further research shows that regional institutional development enhances these relationships. This study enriches the driving factors of enterprises’ exploratory innovation from the perspective of multiple performance feedback, which can provide decision-making references for enterprises’ exploratory innovation strategies.

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Negative performance feedback and corporate venture capital: The moderating effect of CEO overconfidence

Cited by 10 publications

References 35 publications

The roles of financial literacy and overconfidence in investment decisions in Saudi Arabia

The roles of financial literacy and overconfidence in investment decisions in Saudi Arabia

Analysis of the influence of enterprise managers’ overconfidence on the overinvestment behavior of listed companies under the media reports

Impact of multiple performance feedback and regional institutional development on enterprises’ exploratory innovation

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