Tools
Tools
Qiao, L., Adegbite, E. and Nguyen, T.H. 
ORCID: 0000-0001-7170-5882,
2022.
Chief financial officer overconfidence and stock price crash risk.
International Review of Financial Analysis, 84: 102364.
ISSN 1057-5219
|
Text
2302538_Nguyen.pdf - Published version Download (705kB) | Preview |
Abstract
Numerous studies have shown the prevalence of overconfidence among Chief Financial Officers (CFOs). Surprisingly, the real effect of CFO overconfidence is under-researched. Using data from a large sample of US-listed firms over the period 1993–2019 and adopting an eclectic theoretical approach, we find that overconfident CFOs are more likely to increase stock price crash risk than non-overconfident CFOs through risk-taking and bad news hoarding. These findings pass a series of robustness tests. Furthermore, departing from most overconfident studies that merely examine one type of top managers (i.e., Chief Executive Officer (CEO)), we consider the influence of CEO and CFO overconfidence jointly. Interestingly, we find that CFO overconfidence outweighs CEO overconfidence in influencing stock price crash risk. Moreover, the overconfidence effect is intensified when overconfident CFOs collaborate with overconfident CEOs, thus raising stock price crash risk. However, stronger governance and a transparent information environment constrain overconfident CFOs' effect on stock price crash risk. Overall, our findings highlight the importance of CFO overconfidence in determining stock return tail risks.
| Item Type: | Journal article | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Publication Title: | International Review of Financial Analysis | ||||||||
| Creators: | Qiao, L., Adegbite, E. and Nguyen, T.H. | ||||||||
| Publisher: | Elsevier BV | ||||||||
| Date: | November 2022 | ||||||||
| Volume: | 84 | ||||||||
| ISSN: | 1057-5219 | ||||||||
| Identifiers: |
|
||||||||
| Rights: | © 2022 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). | ||||||||
| Divisions: | Schools > Nottingham Business School | ||||||||
| Record created by: | Melissa Cornwell | ||||||||
| Date Added: | 29 Nov 2024 10:46 | ||||||||
| Last Modified: | 29 Nov 2024 10:46 | ||||||||
| URI: | https://irep.ntu.ac.uk/id/eprint/52674 |
Actions (login required)
 |
Edit View |
Views
Views per month over past year
Downloads
Downloads per month over past year
