Ettore Croci
Managerial Overconfidence in High and Low Valuation Markets and Gains to Acquisitions
Croci, Ettore; Petmezas, Dimitris; Vagenas-Nanos, Evangelos
Authors
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.
Citation
Croci, E., Petmezas, D., & Vagenas-Nanos, E. (2010). Managerial Overconfidence in High and Low Valuation Markets and Gains to Acquisitions. International Review of Financial Analysis, 19(5), 368-378. https://doi.org/10.1016/j.irfa.2010.06.003
Journal Article Type | Article |
---|---|
Acceptance Date | Jun 29, 2010 |
Online Publication Date | Jul 6, 2010 |
Publication Date | 2010-12 |
Deposit Date | Aug 2, 2020 |
Journal | International Review of Financial Analysis |
Print ISSN | 1057-5219 |
Electronic ISSN | 1873-8079 |
Publisher | Elsevier |
Peer Reviewed | Peer Reviewed |
Volume | 19 |
Issue | 5 |
Pages | 368-378 |
DOI | https://doi.org/10.1016/j.irfa.2010.06.003 |
Public URL | https://durham-repository.worktribe.com/output/1295566 |
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