The Cultural Origins of CEO Overconfidence

58 Pages Posted: 5 Jun 2021

See all articles by Jens Hagendorff

Jens Hagendorff

King's College London - King's Business School

Yue (Lucy) Liu

University of Edinburgh Business School

Duc Duy Nguyen

Durham University

Date Written: May 21, 2021

Abstract

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

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

Jens Hagendorff (Contact Author)

King's College London - King's Business School

30 Aldwych
London, WC2B 4BG
United Kingdom

Yue (Lucy) Liu

University of Edinburgh Business School ( email )

Old College
South Bridge
Edinburgh, Scotland EH8 9JY
United Kingdom

Duc Duy Nguyen

Durham University ( email )

Mill Hill Lane
Durham, Durham DH1 3HP
United Kingdom

HOME PAGE: http://sites.google.com/site/louisnguyen6589/home

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