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Overconfidence as an important psychological factor can also affect CEO’s cognitive preferences, while there are few studies about the impact of CEO’ overconfidence on the international expansion of companies. This paper aims to fill this gap and further discuss the moderating role of CEO’s overseas experience, CEO duality and ownership.

The authors focus on the Chinese context, collect 2008–2016 data from China's manufacturing industry as sample, use fixed effect model to analyse the effect of CEO overconfidence on international expansion strategy of Chinese firms.

The empirical results show that: CEO overconfidence positively promotes the degree of firm internationalization. CEO foreign experience positively affects the internationalization degree, but can restrain overconfidence thus negatively regulate this impact relationship. When duality is present, both CEO power and managerial discretion are pronounced and they exhibit a stronger effect. Firm’s equity nature will affect the relationship between CEOs' overconfidence and the degree of internationalization. Compared with private enterprises, CEOs in state-owned enterprises have limited power, therefore, this influence relationship is weaker.

This study has emphasized the importance of top executives' psychological characteristics on firm internationalization, which is key application and complement of upper echelons theory and fills the research gap in the literature. In this paper, the authors found the advantages of overconfidence for firms, which helps to understand the complex meaning of overconfidence. The results of moderating effect further explore the application of overconfidence in different context, which has some implications for management practice.

This paper aims to examine the influence of overconfident or conservative CEOs on the performance feedback of R&D investment, as well as the combined impact of CEO overconfidence and demographic characteristics on the relationship between performance feedback of R&D investments.

Grounded in the upper echelon theory, listed companies in China are selected as samples, and the Heckman two-stage model is used to examine all the models.

This paper reveals that overconfident CEOs tend to make suboptimal investment decisions. These decisions are influenced by cognitive biases that have a negative impact on the performance of R&D investments. However, the negatively moderating effects of CEO overconfidence can be mitigated if they have overseas experience or academic background, or they are younger.

These mechanisms highlight the various ways in which CEO psychological factors and demographic characteristics can complement each other.

Face is the most intuitive and representative feature at the individual level. Many studies show that beautiful faces help individuals and enterprises obtain economic benefits and form a high economic premium, but the discussion of their potential social value is insufficient. This study aims to focus on the impact of the personal characteristics of executives. It mainly analyzes the impact mechanism of CEO facial attractiveness on corporate social responsibility (CSR) decision-making, clarifying the social value of beauty from the perspective of CSR.

The authors use the regression model to analyze the panel data set, which was conducted by a sample of Chinese publicly listed firms from 2016 to 2018.

The study found that CEOs with high facial attractiveness are more active in fulfilling CSR, which can usually bring higher social benefits. CEOs with beautiful faces are prone to overconfidence, are optimistic about their ability and the future development of the enterprise and are more willing to increase their investment in CSR. CEO duality can positively regulate the positive correlation between a CEO’s facial attractiveness and CSR.

Based on the perspective of upper echelons theory, this paper explores the mechanism of CEO facial attractiveness on CSR. This study enriches the perspective of the upper echelon’s theoretical research and has essential enlightenment for CEO selection and training practice.

The authors study the relationship between CEO overconfidence and litigation risk by examining employee-level lawsuit data. The purpose of this paper is to better understand the executive characteristics that potentially affect the likelihood of employee litigations.

The authors employ a unique data set of employee lawsuits from the National Labor Relations Board – “Disposition of Unfair Labor Practice Charges” – which includes complaints, litigations and decisions. The data spans the years 2000–2014. The authors employ the option-based CEO overconfidence metric of Malmendier et al. (2011) as the primary explanatory variable.

The authors find that overconfident CEOs are less likely to be subjected to labor-related litigations. The authors document that firms with overconfident CEOs have fewer lawsuits opened by both labor unions and individuals. The authors then investigate the effect of employee litigations on firm performance to understand why overconfident CEOs are less prominent among lawsuits. The authors show that litigations lower corporate investment and value of capital expenditures for responsible firms, which may limit overconfident CEOs’ ability to invest. Therefore, the results may reveal the fact that overconfident CEOs may prefer to align with the interest of their employees to avoid reduced investment opportunities.

The paper makes three main contributions. First, it provides the first large-sample evidence on CEO overconfidence and labor relations. The authors employ data on firm-level labor litigation that contains both the case reason and case outcome. Second, this paper adds to the growing literature of CEO overconfidence and governance practices in the workplace. Finally, the study highlights the importance of employee treatment and explores the impact of labor lawsuits on firm value.

This paper aims to examine the relation between managerial ability and stock price crash risk, conditional on managerial overconfidence. In addition, conditional on managerial overconfidence, the authors investigate the effect of managerial ability on firms’ choice of bad news hoarding channels, which result in a stock price crash.

Using a sample of 24,289 firm-years from companies listed on Compustat and CRSP from 1994 to 2018, the authors conduct panel regression analysis.

The authors find that managerial ability is positively associated with stock price crash risk only when managerial overconfidence is high. Furthermore, the authors find that managerial ability seems to exacerbate (attenuate) the bad news withholding by the overconfident managers using the earnings guidance (earnings management) channel. The authors find limited evidence that high-ability managers are likely to withhold bad news through the overinvestment channel and “other channels” when managers are overconfident. Finally, the authors find that the joint effect of managerial overconfidence and managerial ability on firms’ crash risk is more pronounced when there is a material weakness in firms’ internal controls, high investor belief heterogeneity and high information asymmetry. However, this effect appears to dissipate during the recent financial crisis in 2008.

This research reveals that managerial ability is costly to firms by engendering bad news hoardings and stock price crash risk when managers are overconfident. It also sheds light on how managerial overconfidence and managerial ability affect managers’ choice of bad news withholding channels and stock price crash risk. Finally, the paper is of practical value to the board of directors in selecting the prospective executives.

As the cost of completing a transaction, the green merger and acquisition (M&A) premium paid on mergers can influence whether the acquisition creates value or not. However, studies linking M&A premiums to firm value have had mixed results, even fewer studies have examined the effect of green M&A premiums on bidders’ firm value. The purpose of this paper is to investigate whether and how green M&A premiums affect firm value in the context of China’s heavy polluters.

Using 323 deals between 2008 and 2019 among China’s heavy polluters, this paper estimates with correlation analysis and multiple regression analysis.

Green M&A premiums are negatively associated with firm value. The results are more significant when firms adopt symbolic rather than substantive corporate social responsibility (CSR) strategies. Robustness and endogeneity tests corroborate the findings. The negative relation is stronger when acquiring firms have low governmental subsidy and environmental regulation, when firms have overconfident management, when firms are state-owned and when green M&A occurs locally or among provinces in the same region. This study also analyzes agency cost as an intermediary in the relationship between green M&A premium and firm value, which lends support to the agency-view hypothesis.

This study provides systemic evidence that green M&A premiums damage firm value through agency cost channel and the choice of CSR strategies from the perspective of acquirers. These findings enrich the literature on both the economic consequences of green M&A premiums and the determinants of firm value and provide a plausible explanation for mixed findings on the relationship between green M&A premiums and firm value.

This study aims to examine the effect of CEO’s personal characteristics on earnings management (EM) practices.

The authors use panel data for 201 non-financial companies listed on the Amman Stock Exchange (ASE) for the period 2008-2013. The authors use random effect models to test the hypothesis of this study and extent the analysis to family versus non-family.

The study finds a positive relation between CEO’s overconfidence and EM practices in Jordan. Moreover, the findings reveal that managers in family companies are more likely to engage in EM practices than non-family companies. The findings shed more light on the intricate relationship between CEO’s characteristics, the decision-making process and financial reporting.

Results of this study could be beneficial for a number of users of financial information such as investors, auditors, regulators, lenders, as well other players in the capital market to make right decisions.

A literature review finds that much less studies have investigated the relationship between EM practices and personal CEO characteristics (gender and overconfidence) in developing countries such as Jordan. Furthermore, no study yet has examined the influence of CEO age on EM practices. The authors extend previous literature by providing empirical evidence about effect of some personal CEO’s characteristics on EM practices.

The purpose of this paper is to focus on the moderating effect of CEO's accounting-based attributes on the relationship between chief executive officer (CEO) overconfidence and forecast accuracy in European companies.

Data from a sample of 347 European firms listed on Stoxx Europe 600 index from 2005 to 2018 are used to test the moderation model using moderation regression analysis.

Evidence reveals that CEO overconfidence is negatively associated with forecast accuracy. Further, CEO's accounting-based attributes significantly moderates the impact of CEO overconfidence on forecast quality.

This study is unique in providing European evidence for the moderating effect of CEO's accounting-based attributes on the relationship between CEO overconfidence and forecast quality. This paper is also relevant as it addresses the interaction between two sciences (psychology) to explain the forecast accuracy (accounting).

This paper aims to examine the effect of two CEO characteristics, namely, narcissism and overconfidence on corporate social responsibility (CSR) and the moderating effect of corporate governance (CG) mechanisms in the UK.

Using a sample of 2,360 UK firms listed on the FTSE 400 index for the years 2010–2017, the feasible generalized least squares method was applied to test the hypotheses developed.

The finding argues that CEO narcissism and overconfidence positively affect CSR. In addition, this paper found that CG effectiveness moderates the CEO’s CSR behavior.

This research is subjected to two limitations. First, this study used different measures to proxy for CEO narcissism and overconfidence. However, other measures are not included owing to the difficulty to collect data regarding these measures. Second, this study includes only CSR performance instead of all other dimensions and categories of CSR. These limitations do not change the conclusions of this research, and they may provide guidance for further investigations.

Given that the CEOs psychological and behavioral features are critical in understanding CSR, shareholders and boards of directors should incorporate the behavioral aspects of narcissistic and overconfident CEOs in the design of CSR strategy.

This study emphasizes the importance of top executives’ psychological characteristics for CSR, which is a key application and complements the “upper echelons theory” and fills the research gap in the literature. This is one of the few studies that investigate the interaction between CG, CEO profile and CSR.

The main purpose of this paper is to look at the link between chief executive officer (CEO) behavior and corporate social responsibility (CSR) engagement with the moderating role of bank risk-taking behavior.

Based on a 13-year data set (2007–2019), the authors applied the feasible generalized least squares with panel data to test the hypotheses.

The findings reveal a positive and significant link between CEO behavior and CSR engagement. Based on these findings, it can be argued that the characteristics of the CEO of the banks would improve the CSR strategies. Furthermore, the study suggests a moderating effect of bank risk-taking in the link between psychological bias and corporate social responsibility engagement (CSR engagement).

As CEO behavioral characteristics are essential to understanding CSR practice, boards of directors should consider the behavioral traits of dominant and overconfident CEOs while designing CSR practices.

If the bank behaves in a socially responsible manner, direct and indirect stakeholders may be able to evaluate the level of risk-taking in more detail.

This research highlights the importance of CEO behavior characteristics for CSR, which is a crucial application that supports the upper echelons theory; and fills a gap in literature research. It is one of the few studies examining the interaction between risk-taking, CEO behavior and CSR engagement.