Social ties, managerial overconfidence, and investment efficiency

Yong Joo Kang, Ho Young Lee, Hyun Young Park, Ju Hyoung Park

Research output: Contribution to journalArticlepeer-review

12 Citations (Scopus)

Abstract

This study examines the association between the social ties among board members and investment efficiency and whether managerial overconfidence aggravates this association. We find that social ties among directors are negatively associated with investment efficiency and managerial overconfidence aggravates this association. These results suggest that social ties between inside and outside directors weaken board independence, which ultimately has a negative impact on optimal investment decision-making. In addition, stakeholders must effectively monitor managers who are overconfident when board members are socially tied.

Original languageEnglish
Article number102300
JournalFinance Research Letters
Volume46
DOIs
Publication statusPublished - 2022 May

Bibliographical note

Publisher Copyright:
© 2021 Elsevier Inc.

All Science Journal Classification (ASJC) codes

  • Finance

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