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This study aims to investigate the impact of pollution control bonds (PCBs) on overinvestment within utility firms.

This empirical study analyzes a data set comprising 215 US energy firms observed from 2011 to 2021, using the ordinary least square regression with standard errors adjusted for firm-level clustering.

The study reveals a negative relationship between PCBs and overinvestment, indicating that PCBs are an effective tool in curbing excessive investment. Additionally, it demonstrates that chief executive officer (CEO) overconfidence diminishes the influence of PCBs on overinvestment. These findings remain robust across various metrics for measuring overinvestment and CEO overconfidence, as well as when alternative estimation methods are used. These results align with insights derived from agency theory and upper echelon theories.

Regulators are encouraged to actively promote the use of PCBs as a financing tool for environmentally focused initiatives. To achieve this, regulatory bodies should enhance their presence within the utility sector, particularly in regions grappling with higher pollution levels. This requires the implementation of strategic policies and regulatory frameworks aimed at mitigating excessive investments. Simultaneously, policymakers should take proactive measures to introduce financial instruments designed to optimize investment efficiency, thus facilitating eco-friendly projects.

To the best of the authors’ knowledge, this paper holds the distinction of being the first to examine the impact of a specific type of green bond, namely, PCBs, on overinvestment. Furthermore, it contributes to the literature on personality traits, particularly within the context of the upper echelon theory, by investigating the moderating influence of CEO overconfidence.

The role of chief executive officer (CEO) personal characteristics in shaping corporate policies has attracted increasing academic attention in the past two decades. In this review, the authors synthesize extant research on CEO attributes by reviewing 232 articles published in 29 journals from the accounting, finance and management literature. This review provides an overview of existing findings, highlights current trends and interdisciplinary differences in research approaches and identifies potential avenues for future research.

To review the literature on CEO attributes, the authors manually collected peer-reviewed articles in accounting, finance and management journals from 2000 to 2021. The authors conducted in-depth analysis of each paper and manually recorded the theories, data sources, country of study, study period, measures of CEO attributes and dependent variables. This procedure helped the authors group the selected articles into themes and sub-themes. The authors compared the findings in various disciplines and provided direction for future research.

The authors highlight the role of CEO personal attributes in influencing corporate decision-making and firm outcomes. The authors categorize studies of CEO traits into three main research themes: (1) demographic attributes and experience (including age, gender, culture, experience, education); (2) CEO interactions with others (social and political networks) and (3) underlying attributes (including personality, values and ideology). The evidence shows that CEO characteristics significantly affect a wide range of specific corporate policies that serve as mechanisms through which individual CEOs determine firm success and performance.

CEO selection is one of the most crucial decisions made by corporations. The study findings provide valuable insights to corporate executives, boards, investors and practitioners into how CEOs’ personal characteristics can impact future firm decisions and outcomes that can, in turn, inform the high-stake process of CEO recruitment and selection. The study findings have significant practical implications for corporations, such as contributing to executive training programs, to assist executives and directors attain a greater level of self-awareness.

Building on the theoretical foundation of upper echelons theory, the authors offer an integrated theoretical framework to consolidate existing empirical research on the impacts of CEO personal attributes on firm outcomes across accounting and finance (A&F) and management literature. The study findings provide a roadmap for scholars to bridge the interdisciplinary divide between A&F and management research. The authors advocate a more holistic and multifaceted approach to examining CEOs, each of whom embodies a myriad of personal characteristics that comprise their unique identity. The study findings encourage future researchers to expand the investigation of the boundary conditions that magnify or moderate the impacts of CEO idiosyncrasies.

This study aims to explain the cognitive bias of overconfidence and portray the different ways in which overconfident top managers may affect firm outcomes. This paper outlines their opportunities and risks and how these managers are surrounded by contextual factors.

This study draws on a systematic overview of the current literature on senior executives' overconfidence and empirical studies investigating its impact on strategic outcomes.

This study identifies the opportunities and risks of overconfident top managers in firms and considers the contextual factors that influence firm outcomes. The results provide three important managerial implications for interactions with overly confident top managers.

These findings help us understand top managers' overconfidence. Organizations receive guidance on how to constrain inappropriately confident top managers who are detrimental to their businesses.

This study contributes to a better understanding of overconfidence among top managers, illustrates associated opportunities and risks and provides recommendations for controlling and dealing with top managers characterized by this cognitive bias.

This paper aims to review empirical research on the relationship between institutional ownership (IO) and board governance (85 studies).

Based on agency and upper echelons theory, the heterogeneous monitoring function of specific types and the nature of institutional investors on board composition, compensation and chief executive officer (CEO) characteristics will be focused.

The author found that most studies have referred to archival studies, analyzed the impact of board governance on IO, focused on CEO characteristics, neglected IO heterogeneity and advanced regression models to address endogeneity concerns. In line with the theoretical framework, the relationship between total IO and board governance is heterogeneous. However, specific types such as foreign, dedicated and pressure-resistant institutions represent active monitoring tools and push for increased board governance.

The author provided useful recommendations for future research from a content and methodological perspective, e.g. the need for analyzing the impact of IO on sustainable board governance and other characteristics of top management team members, e.g. the chief financial officer.

As many regulatory bodies implemented regulations to promote shareholder rights and board governance, this literature review highlights the connections of both corporate governance mechanisms. Managers should conduct a careful and timely investor analysis and change the composition and compensation of the board of directors in line with institutional investors’ preferences.

This analysis makes useful contributions to prior research by focusing on IO and board governance, whereas the author structured the heterogeneous variables and results within the structured literature review. The authors guides researchers, regulatory bodies and business practice in this corporate governance topic.

Mergers and acquisitions (M&As) are important strategic actions undertaken by firms to access resources and markets. However, firms face substantial challenges in M&As during deal completion. While prior literature reviews synthesize the studies on the post-merger consequences of M&As, the literature on deal completion is largely fragmented. In this paper, the authors synthesize prior literature on deal completion into the antecedents and consequences framework and map various studies across the international business and management, finance and accounting literature at the macro-, meso- and micro-levels.

The authors adopt a content analysis-based methodology to conduct the review. First, the authors identify existing literature on deal completion based on keyword searches. Next, the authors propose a framework that integrates the extant literature from a multi-theoretic perspective across four broad themes: concepts, antecedents, implications and moderators. In this study, the authors consider not only empirical but also conceptual papers to strengthen the theoretical foundations of M&A literature. Finally, after synthesizing various studies, the authors highlight a future research agenda on deal completion.

Based on the review, this study provides important avenues for future research on M&A deal completion.

This study theoretically integrates multi-disciplinary and multi-country research on acquisition completion.

This study investigates the influence of social trust on the attainment of corporate environmental, social and governance (ESG) objectives.

This study conducts panel regression analysis on a distinctive dataset for 2009–2017 on Chinese firms.

The analysis reveals a significant positive association between social trust and firm-level ESG practices. Moreover, the impact of social trust on shaping ESG outcomes is further amplified by factors such as economic growth, corporate governance standards and institutional quality. This relationship remains statistically positive when the authors employ alternative measures and methodologies, such as the instrumental variables, propensity score matching and difference-in-differences approaches. Notably, the results of heterogeneity tests indicate that the Trust–ESG nexus is more prominent for state-owned enterprises and firms with substantial market capitalization, superior profitability and higher leverage.

This study expands the comprehension of the determinants of ESG and underscores the influential role of social trust as an informal institution in enhancing a firm's ESG performance.

The purpose of this paper is to integrate academic research on hubristic organizational leaders by proposing a comprehensive conceptual framework and research directions on the hubristic literature.

The paper systematically reviewed 25 years of literature on hubristic organizational leaders based on the PRISMA methodology.

The literature on hubristic leaders is analyzed, and a conceptual framework is presented that highlights the antecedent, consequence, mediators and moderators. Literature has primarily focused on the negative impact of hubris leadership concerning firm performance and destructive behaviors. Few scholars have explored the positive side of hubris leadership, relating it to innovation and product success.

This paper presents the first systematic review of hubristic organizational leaders, to the best of the authors’ knowledge. The review provides an improved grasp of the current status of research, trends and potential future research directions.

Research has focused primarily on the antecedents that influence the risk taking of CEOs themselves. This study examines how an important event experienced by a CEO at a direct rival firm influences a CEO's risk-taking. It also examines how prior firm performance relative to aspirations moderates the relationship.

In order to test the hypothesis, the authors perform an a difference-in-differences methodology.

Using a difference-in-differences methodology, we find that when a CEO wins a prestigious CEO award, competitor CEOs increase their firm risk-taking in the post-award period. The proclivity becomes stronger when their prior firm performance relative to aspirations is better. These findings suggest that a CEO winning a prominent CEO award influences competitor CEOs' risk-taking.

This study contributes to the literature on managerial risk-taking by highlighting that a star CEO winning a prominent award may serve as a striving aspiration and induce competitor CEOs to take risks, and that two different types of aspirations – striving and competitive aspirations – interact to influence the competitor CEOs' risk-taking.

The behavioural theory adds a new paradigm of analysis with the assumptions of the decision maker’s cognitive biases and their repercussions on financing decisions. The aim of the study is to analyse the repercussions of these biases on the adjustment speed of firm’s capital structure toward the optimal level.

Based on a partial adjustment model, the study uses the Dynamic Panel Fractional estimator to analyse panel data from 4,990 Portuguese entrepreneurial firms.

The results show that the cognitive overconfidence bias impacts the entrepreneurial firm’s capital structure. In fact, the firms run by overconfident managers adjust more slowly than their counterparts. Furthermore, the findings suggest that entrepreneurial firms make relatively fast adjustments toward the optimal debt level and follow a hierarchical financing order in the funding process.

The results of this paper are not only interesting to the academia, but also contain practical implications for corporate, institutional and business policy and governance. First, the paper introduces a new measure of cognitive bias in optimistic managers, which is useful for current and future academic research. Also, in practical terms, the findings of the paper reveal that when a company is contemplating hiring a manager, it should consider whether they need an optimistic or non-optimistic manager based on the company's present life cycle or situation.

The current analysis extends the existing literature. The study suggests that financial classical and behavioural paradigms should not be separated, which can provide evidence to help narrow the gap between these two major perspectives.

Referring to “behavioural finance” and “normative model” theories, this study explores the relative significance of behavioural heuristic biases in the investment decisions of real estate investment trusts (REITs) when compared with the conventional normative decision factors, with an ultimate aim to identify the significant behavioural factors that should be avoided to ensure rational asset acquisitions and market efficiency.

A triangulation approach was adopted. Qualitative multiple case studies were conducted, with four cases selected from Australian and New Zealand REITs across the industry, to identify what normative and behavioural finance factors are involved in investment decisions. This formed the basis for the subsequent expert review survey to explore how significant the behavioural factors were manifested in the judgement when compared with the normative factors.

Three out of four theoretical behavioural factors manifested themselves in the investment decisions: investor sentiment, anchoring factors and overconfidence. The overall impact of these three behavioural factors was that they were as significant as normative factors in investment decisions. The heuristic availability of information was found to have no significant effect on experienced REIT fund managers.

The findings were based on four multiple cases and an expert review survey of six frontline fund managers, which form a baseline upon which further research can be conducted to widen the scope of research to cover all REITs in Australasia so that the results can become more robust to benefit the entire market in the region.

As behavioural factors are significant in the decision-making process, REIT fund managers should raise awareness to avoid the significant behavioural factors identified, in particular investor sentiment, which was found to be the most significant one.

This study confirms the relative significance of behavioural factors in property investment decisions within the context of Australasian REITs and alerts fund managers to the ways they should follow to ensure rational investments and market efficiency. It also extends the scale of existing studies to cover not only Australia but also New Zealand for the benefit of the entire Australasian market.