How do overconfident CEOs behave in competitive product markets: Evidence from stock price crash risk
This paper investigates how CEO overconfidence affects the stock price crash risk in a competitive environment. Using a sample of French companies, we find that overconfident CEOs positively influence the stock price crash risk. This finding suggests that overconfident CEOs are more likely to keep m...
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| Publicado no: | URI:https://journals.openedition.org/fcs, |
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| Auteurs principaux: | , , |
| Formato: | Article ou chapitre numérique |
| Idioma: | Anglais |
| Publicado em: |
Finance Contrôle Stratégie
2022
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| Acesso em linha: | Accès Université d'Orléans et IFPM Accès Université d'Orléans et IFPM |
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openedition-oai:revues.org:fcs_9412 |
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openedition |
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openedition-oai:revues.org:fcs_9412 https://doi.org/10.4000/fcs.9412 urn:doi:10.4000/fcs.9412 en https://journals.openedition.org/fcs/9412 2022-07-26T02:00:00Z info:eu-repo/semantics/openAccess article info:eu-repo/semantics/article urn:handle:20.500.13089/gato All rights reserved How do overconfident CEOs behave in competitive product markets: Evidence from stock price crash risk Finance Contrôle Stratégie Association FCS info:eu-repo/semantics/reference/issn/2261-5512 info:eu-repo/semantics/reference/issn/1287-1141 URI:https://journals.openedition.org/fcs DEPOERS, Florence GUIZANI, Assil LAKHAL, Faten Concurrence sur le marché Sur-confiance des dirigeants Risque de chute du cours d’action. CEO overconfidence Stock price crash risk Product market competition. This paper investigates how CEO overconfidence affects the stock price crash risk in a competitive environment. Using a sample of French companies, we find that overconfident CEOs positively influence the stock price crash risk. This finding suggests that overconfident CEOs are more likely to keep money-losing projects and hoard bad news because they overestimate the long-term value of their projects, leading to stock price crashes. The results also show that the positive effect of CEO overconfidence on the stock price crash risk is less pronounced in competitive product markets. This result suggests that product market competition can help constraining the managerial irrationality effect on stock price crash risk. Ce papier examine l’effet du comportement sur-confiant du dirigeant sur le risque de chute des cours boursiers dans un environnement concurrentiel. Sur un échantillon d’entreprises françaises de 2007 à 2016, les résultats montrent que la sur-confiance des dirigeants augmente le risque de chute du cours d’action. Ces résultats suggèrent que les dirigeants sur-confiants dissimulent inconsciemment les mauvaises performances, entrainant une chute du cours d’action. Nous montrons également qu’en présence d’une concurrence accrue sur le marché de biens et services, l’effet positif de la sur-confiance sur le risque de chute est moins prononcé. Ce résultat suggère que la compétition sur les marchés de biens et services peut limiter l’effet de l’irrationalité des dirigeants sur le risque de chute des cours boursiers. |
| collection |
OpenEdition Journal |
| language |
Anglais |
| format |
Article ou chapitre numérique |
| building |
0/Bibliothèque numérique/ 1/Bibliothèque numérique/OpenEdition Journals/ |
| topic |
Concurrence sur le marché Sur-confiance des dirigeants Risque de chute du cours d’action. CEO overconfidence Stock price crash risk Product market competition. |
| spellingShingle |
Concurrence sur le marché Sur-confiance des dirigeants Risque de chute du cours d’action. CEO overconfidence Stock price crash risk Product market competition. DEPOERS, Florence GUIZANI, Assil LAKHAL, Faten How do overconfident CEOs behave in competitive product markets: Evidence from stock price crash risk |
| description |
This paper investigates how CEO overconfidence affects the stock price crash risk in a competitive environment. Using a sample of French companies, we find that overconfident CEOs positively influence the stock price crash risk. This finding suggests that overconfident CEOs are more likely to keep money-losing projects and hoard bad news because they overestimate the long-term value of their projects, leading to stock price crashes. The results also show that the positive effect of CEO overconfidence on the stock price crash risk is less pronounced in competitive product markets. This result suggests that product market competition can help constraining the managerial irrationality effect on stock price crash risk. |
| author |
DEPOERS, Florence GUIZANI, Assil LAKHAL, Faten |
| author_facet |
DEPOERS, Florence GUIZANI, Assil LAKHAL, Faten |
| author_sort |
DEPOERS, Florence |
| title |
How do overconfident CEOs behave in competitive product markets: Evidence from stock price crash risk |
| title_short |
How do overconfident CEOs behave in competitive product markets: Evidence from stock price crash risk |
| title_full |
How do overconfident CEOs behave in competitive product markets: Evidence from stock price crash risk |
| title_fullStr |
How do overconfident CEOs behave in competitive product markets: Evidence from stock price crash risk |
| title_full_unstemmed |
How do overconfident CEOs behave in competitive product markets: Evidence from stock price crash risk |
| title_sort |
how do overconfident ceos behave in competitive product markets: evidence from stock price crash risk |
| publisher |
Finance Contrôle Stratégie |
| publishDate |
2022 |
| container_title |
URI:https://journals.openedition.org/fcs |
| url |
https://ezproxy.univ-orleans.fr/login?url=https://doi.org/10.4000/fcs.9412 https://ezproxy.univ-orleans.fr/login?url=https://journals.openedition.org/fcs/9412 |
| _version_ |
1877293105306140672 |