CEO overconfidence and the speed of adjustment of cash holdings

El Kalak, Izidin ORCID: https://orcid.org/0000-0002-2992-4042, Goergen, Marc ORCID: https://orcid.org/0000-0003-4391-2651 and Guney, Yilmaz 2025. CEO overconfidence and the speed of adjustment of cash holdings. European Journal of Finance 31 (2) , pp. 202-229. 10.1080/1351847X.2024.2364829

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Abstract

In this study, we examine the links between CEO overconfidence, the speed of adjustment (SOA) of cash holdings, and firm value for listed US firms, finding a positive effect of CEO overconfidence on SOA. We address endogeneity concerns using a difference-in-differences approach, propensity score matching, and entropy balancing. Our results are robust to the use of alternative estimation methods. Finally, we conclude that financial constraints, leverage, and corporate governance quality affect the relation between CEO overconfidence and the SOA of cash holdings.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Publisher:	Taylor and Francis Group
ISSN:	1351-847X
Date of First Compliant Deposit:	2 July 2024
Date of Acceptance:	30 May 2024
Last Modified:	12 Feb 2025 14:30
URI:	https://orca.cardiff.ac.uk/id/eprint/169628

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