| Summary: | 碩士 === 國立政治大學 === 財務管理研究所 === 103 === Empirical literatures show that value stocks outperform growth stocks consistently. Recent researches also document that only the moderately overconfident CEOs make optimal investment decisions and increase the firm value. Thus, in this paper, we argue that value premium may not hold in some particular firm characteristic if value and growth firms are subdivided into firms managed with different CEO confidence level. Using a sample of U.S firms over 1997-2013 from ExecuComp, we find, in growth firms, only the firms managed by excessively overconfident CEOs results in poor performances. Besides, the value firms managed by excessively diffident CEOs earn the highest return; however, the growth firms earn a positive return when the CEOs are moderately overconfident. We show that firms should hire CEOs matched their specific characteristics to increase firm value.
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