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Overconfidence and Early-life Experiences: The Impact of Managerial Traits on Corporate Financial Policies / Ulrike Malmendier, Geoffrey Tate, Jonathan Yan.
- Format:
- Book
- Author/Creator:
- Malmendier, Ulrike.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w15659.
- NBER working paper series no. w15659
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Overconfidence and Early-life Experiences
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2010.
- Summary:
- We show that measurable managerial characteristics have significant explanatory power for corporate financing decisions beyond traditional capital-structure determinants. First, managers who believe that their firm is undervalued view external financing as overpriced, especially equity. Such overconfident managers use less external finance and, conditional on accessing risky capital, issue less equity than their peers. Second, CEOs with Depression experience are averse to debt and lean excessively on internal finance. Third, CEOs with military experience pursue more aggressive policies, including heightened leverage. Complementary measures of CEO traits based on press portrayals confirm the results.
- Notes:
- Print version record
- January 2010.
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