The Cultural Origins of CEO Overconfidence
58 Pages Posted: 5 Jun 2021
Date Written: May 21, 2021
We explore the role of cultural heritage in explaining CEOs overconfidence and its impact on the propensity and performance of corporate acquisitions. CEOs are more prone to overconfidence if the culture in their ancestral country of origin is characterized by strong individualism, independence, long-term orientation, and inequality. We find that the culture-related sources of CEO overconfidence have a significantly negative impact on acquisition performance.
Keywords: CEOs, Overconfidence, Cultural Heritage, Mergers and Acquisitions
JEL Classification: G34, G4, G41, Z1
Suggested Citation: Suggested Citation
Hagendorff, Jens and Liu, Yue (Lucy) and Nguyen, Duc Duy, The Cultural Origins of CEO Overconfidence (May 21, 2021). Available at SSRN: https://ssrn.com/abstract=3855650 or http://dx.doi.org/10.2139/ssrn.3855650
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