In this paper we empirically investigate bidders' performance managed by overconfident and non-overconfident managers in high and low market valuation periods. Using a sample of UK acquisitions in the period 1990-2005, we provide evidence that the interaction between market valuation and different behavioral traits of managers is a determinant of bidders' returns. In contrast to overconfident managers, non-overconfident managers conduct value-creative acquisition deals in all valuation periods. In addition, when we control for acquirer and deal characteristics, we find that bidders with non-overconfident managers gain the most in high valuation periods, while firms are better off without overconfident managers in any type of market conditions. © 2010 Elsevier Inc.

Croci, E., Petmezas, D., Vagenas Nanos, E. (2010). Managerial overconfidence in High and Low valuation markets: Evidence from the UK. INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS, 19(5), 368-378 [10.1016/j.irfa.2010.06.003].

Managerial overconfidence in High and Low valuation markets: Evidence from the UK

CROCI, ETTORE;
2010

Abstract

In this paper we empirically investigate bidders' performance managed by overconfident and non-overconfident managers in high and low market valuation periods. Using a sample of UK acquisitions in the period 1990-2005, we provide evidence that the interaction between market valuation and different behavioral traits of managers is a determinant of bidders' returns. In contrast to overconfident managers, non-overconfident managers conduct value-creative acquisition deals in all valuation periods. In addition, when we control for acquirer and deal characteristics, we find that bidders with non-overconfident managers gain the most in high valuation periods, while firms are better off without overconfident managers in any type of market conditions. © 2010 Elsevier Inc.
Articolo in rivista - Articolo scientifico
market valuation, managerial overconfidence, stock options, short-term wealth effects
English
2010
19
5
368
378
none
Croci, E., Petmezas, D., Vagenas Nanos, E. (2010). Managerial overconfidence in High and Low valuation markets: Evidence from the UK. INTERNATIONAL REVIEW OF FINANCIAL ANALYSIS, 19(5), 368-378 [10.1016/j.irfa.2010.06.003].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/22360
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