Can Strong Boards and Trading Their Own Firm's Stock Help CEOs Make Better Decisions? Evidence from Acquisitions by Overconfident CEOs Academic Article

abstract

• AbstractLittle evidence exists on whether boards help managers make better decisions. We provide evidence that strong and independent boards help overconfident chief executive officers (CEOs) avoid honest mistakes when they seek to acquire other companies. In addition, we find that once-overconfident CEOs make better acquisition decisions after they experience personal stock trading losses, providing evidence that a managers recent personal experience, and not just educational and early career experience, influences firm investment policy. Finally, we develop and validate a new CEO overconfidence measure that is easily constructed from machine-readable insider trading data, unlike previously used measures.

authors

• Kolasinski, Adam

published proceedings

• JOURNAL OF FINANCIAL AND QUANTITATIVE ANALYSIS

altmetric score

• 8

author list (cited authors)

• Kolasinski, A. C., & Li, X. u.

citation count

• 98

complete list of authors

• Kolasinski, Adam C||Li, Xu

publication date

• August 2013

publisher

• Cambridge University Press (CUP)  Publisher

keywords

• 35 Commerce, Management, Tourism And Services
• 3502 Banking, Finance And Investment
• 3507 Strategy, Management And Organisational Behaviour
• Clinical Research

Digital Object Identifier (DOI)

• 10.1017/S0022109013000392

start page

• 1173

end page

• 1206

volume

• 48

issue

• 4

URL

• http%3A%2F%2Fdx.doi.org%2F10.1017%2Fs0022109013000392