IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v67y2014i7p1414-1420.html
   My bibliography  Save this article

Are we overconfident in executive overconfidence research? An examination of the convergent and content validity of extant unobtrusive measures

Author

Listed:
  • Hill, Aaron D.
  • Kern, David A.
  • White, Margaret A.

Abstract

Building understanding of overconfident executives is central to a growing literature that spans a number of disciplines. Much of this research has utilized unobtrusive, or indirect, measures to assess executive overconfidence from secondary data sources. We analyze the convergent and content validity of seven extant unobtrusive measures of executive overconfidence. The results of our analyses indicate that these measures do not exhibit adequate convergence, suggesting that existing measures are not measuring the same construct. Further, we administer a sort task to academic colleagues to assess whether scholars believe that the seven measures are adequately assessing the intended construct. The results of our sort task indicate that scholars did not categorize any of the seven measures as sufficient for measuring overconfidence. We conclude with suggestions for future research to address the inadequate convergent and content validity found in our assessment of extant measures of executive overconfidence.

Suggested Citation

  • Hill, Aaron D. & Kern, David A. & White, Margaret A., 2014. "Are we overconfident in executive overconfidence research? An examination of the convergent and content validity of extant unobtrusive measures," Journal of Business Research, Elsevier, vol. 67(7), pages 1414-1420.
    • Handle: RePEc:eee:jbrese:v:67:y:2014:i:7:p:1414-1420
    DOI: 10.1016/j.jbusres.2013.08.011
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296313003093
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbusres.2013.08.011?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Roll, Richard, 1986. "The Hubris Hypothesis of Corporate Takeovers," The Journal of Business, University of Chicago Press, vol. 59(2), pages 197-216, April.
    2. Mathew L. A. Hayward & Dean A. Shepherd & Dale Griffin, 2006. "A Hubris Theory of Entrepreneurship," Management Science, INFORMS, vol. 52(2), pages 160-172, February.
    3. Malmendier, Ulrike & Tate, Geoffrey, 2008. "Who makes acquisitions? CEO overconfidence and the market's reaction," Journal of Financial Economics, Elsevier, vol. 89(1), pages 20-43, July.
    4. Ulrike Malmendier & Geoffrey Tate, 2005. "CEO Overconfidence and Corporate Investment," Journal of Finance, American Finance Association, vol. 60(6), pages 2661-2700, December.
    5. Yakov Amihud & Baruch Lev, 1981. "Risk Reduction as a Managerial Motive for Conglomerate Mergers," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 605-617, Autumn.
    6. MacKenzie, Scott B. & Podsakoff, Philip M. & Fetter, Richard, 1991. "Organizational citizenship behavior and objective productivity as determinants of managerial evaluations of salespersons' performance," Organizational Behavior and Human Decision Processes, Elsevier, vol. 50(1), pages 123-150, October.
    7. Mohan Subramaniam & N. Venkatraman, 2001. "Determinants of transnational new product development capability: testing the influence of transferring and deploying tacit overseas knowledge," Strategic Management Journal, Wiley Blackwell, vol. 22(4), pages 359-378, April.
    8. Busenitz, Lowell W. & Barney, Jay B., 1997. "Differences between entrepreneurs and managers in large organizations: Biases and heuristics in strategic decision-making," Journal of Business Venturing, Elsevier, vol. 12(1), pages 9-30, January.
    9. Diamantopoulos, Adamantios & Riefler, Petra & Roth, Katharina P., 2008. "Advancing formative measurement models," Journal of Business Research, Elsevier, vol. 61(12), pages 1203-1218, December.
    10. Bollaert, Helen & Petit, Valérie, 2010. "Beyond the dark side of executive psychology: Current research and new directions," European Management Journal, Elsevier, vol. 28(5), pages 362-376, October.
    11. Brian K. Boyd & Steve Gove & Michael A. Hitt, 2005. "Consequences of measurement problems in strategic management research: the case of Amihud and Lev," Strategic Management Journal, Wiley Blackwell, vol. 26(4), pages 367-375, April.
    12. Christopher L. Shook & David J. Ketchen & G. Tomas M. Hult & K. Michele Kacmar, 2004. "An assessment of the use of structural equation modeling in strategic management research," Strategic Management Journal, Wiley Blackwell, vol. 25(4), pages 397-404, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. MinChung Kim & Guiyang Xiong & Kwang-Ho Kim, 2018. "Where does pride lead? Corporate managerial hubris and strategic emphasis," Journal of the Academy of Marketing Science, Springer, vol. 46(3), pages 537-556, May.
    2. Ismail, Ahmad & Mavis, Christos P., 2022. "A new method for measuring CEO overconfidence: Evidence from acquisitions," International Review of Financial Analysis, Elsevier, vol. 79(C).
    3. Dominik M. Piehlmaier, 2022. "Overconfidence and the adoption of robo-advice: why overconfident investors drive the expansion of automated financial advice," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-24, December.
    4. Johannes Brunzel, 2021. "Overconfidence and narcissism among the upper echelons: a systematic literature review," Management Review Quarterly, Springer, vol. 71(3), pages 585-623, July.
    5. McCarthy, Scott & Oliver, Barry & Song, Sizhe, 2017. "Corporate social responsibility and CEO confidence," Journal of Banking & Finance, Elsevier, vol. 75(C), pages 280-291.
    6. H. Young Baek & Florence Neymotin, 2019. "Overconfident entrepreneurs: Innovating more and paying the piper," Economics Bulletin, AccessEcon, vol. 39(2), pages 1144-1153.
    7. Gullifor, Daniel P. & Petrenko, Oleg V. & Chandler, Jeffrey A. & Quade, Matthew J. & Rouba, Yury, 2023. "Employee reactions to perceived CSR: The influence of the ethical environment on OCB engagement and individual performance," Journal of Business Research, Elsevier, vol. 161(C).
    8. Janina Sundermeier & Martin Gersch & Jörg Freiling, 2020. "Hubristic Start‐up Founders – The Neglected Bright and Inevitable Dark Manifestations of Hubristic Leadership in New Venture Creation Processes," Journal of Management Studies, Wiley Blackwell, vol. 57(5), pages 1037-1067, July.
    9. Aaron D. Hill & Tessa Recendes & Yuting Yang, 2023. "Precarious situations: A prelude to hiring more hubristic chief executive officers," Strategic Management Journal, Wiley Blackwell, vol. 44(3), pages 812-828, March.
    10. Joon Mahn Lee & Jung Chul Park & Guoli Chen, 2023. "A cognitive perspective on real options investment: CEO overconfidence," Strategic Management Journal, Wiley Blackwell, vol. 44(4), pages 1084-1110, April.
    11. James R. Scotter, 2020. "Narcissism in CEO research: a review and replication of the archival approach," Management Review Quarterly, Springer, vol. 70(4), pages 629-674, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Johannes Brunzel, 2021. "Overconfidence and narcissism among the upper echelons: a systematic literature review," Management Review Quarterly, Springer, vol. 71(3), pages 585-623, July.
    2. Indy Bernoster & Cornelius A. Rietveld & A. Roy Thurik & Olivier Torrès, 2018. "Overconfidence, Optimism and Entrepreneurship," Sustainability, MDPI, vol. 10(7), pages 1-14, June.
    3. Martynova, M. & Renneboog, L.D.R., 2005. "Takeover Waves : Triggers, Performance and Motives," Other publications TiSEM ed134639-33ef-4720-9935-e, Tilburg University, School of Economics and Management.
    4. Lucrezia Fattobene & Marco Caiffa, 2016. "Sitting on the Board or Sitting on the Throne? Evidence of Boards' Overconfidence from the Italian Market," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 45(2), pages 235-269, July.
    5. Martynova, M. & Renneboog, L.D.R., 2005. "Takeover Waves : Triggers, Performance and Motives," Discussion Paper 2005-107, Tilburg University, Center for Economic Research.
    6. Joon Mahn Lee & Byoung‐Hyoun Hwang & Hailiang Chen, 2017. "Are founder CEOs more overconfident than professional CEOs? Evidence from S&P 1500 companies," Strategic Management Journal, Wiley Blackwell, vol. 38(3), pages 751-769, March.
    7. Cédric Gutierrez & Thomas Åstebro & Tomasz Obloj, 2020. "The Impact of Overconfidence and Ambiguity Attitude on Market Entry," Organization Science, INFORMS, vol. 31(2), pages 308-329, March.
    8. Utz Weitzel & Killian J. McCarthy, 2011. "Theory and evidence on mergers and acquisitions by small and medium enterprises," International Journal of Entrepreneurship and Innovation Management, Inderscience Enterprises Ltd, vol. 14(2/3), pages 248-275.
    9. Boubakri, Narjess & Cosset, Jean-Claude & Mishra, Dev & Somé, Hyacinthe Y., 2023. "The value of risk-taking in mergers: Role of ownership and country legal institutions," Journal of Empirical Finance, Elsevier, vol. 70(C), pages 427-444.
    10. Robert A. Lowe & Arvids A. Ziedonis, 2006. "Overoptimism and the Performance of Entrepreneurial Firms," Management Science, INFORMS, vol. 52(2), pages 173-186, February.
    11. Simon, Mark & Shrader, Rodney C., 2012. "Entrepreneurial actions and optimistic overconfidence: The role of motivated reasoning in new product introductions," Journal of Business Venturing, Elsevier, vol. 27(3), pages 291-309.
    12. Janina Sundermeier & Martin Gersch & Jörg Freiling, 2020. "Hubristic Start‐up Founders – The Neglected Bright and Inevitable Dark Manifestations of Hubristic Leadership in New Venture Creation Processes," Journal of Management Studies, Wiley Blackwell, vol. 57(5), pages 1037-1067, July.
    13. Evbaziegbere ISIBOR (Ph.D) & Joel OBAYAGBONA (Ph.D), 2024. "Managerial Irrationality and Dividend Policy of Non-Financial Firms in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(7), pages 1360-1373, July.
    14. Hwang, Hyoseok (David) & Kim, Hyun-Dong & Kim, Taeyeon, 2020. "The blind power: Power-led CEO overconfidence and M&A decision making," The North American Journal of Economics and Finance, Elsevier, vol. 52(C).
    15. Andreou, Panayiotis C. & Doukas, John A. & Koursaros, Demetris & Louca, Christodoulos, 2019. "Valuation effects of overconfident CEOs on corporate diversification and refocusing decisions," Journal of Banking & Finance, Elsevier, vol. 100(C), pages 182-204.
    16. Martynova, M. & Renneboog, L.D.R., 2005. "Takeover Waves : Triggers, Performance and Motives," Other publications TiSEM 9fcfd273-882a-4b89-9c65-6, Tilburg University, School of Economics and Management.
    17. H. Young Baek & Florence Neymotin, 2019. "Overconfident entrepreneurs: Innovating more and paying the piper," Economics Bulletin, AccessEcon, vol. 39(2), pages 1144-1153.
    18. Runesson, Emmeli & Samani, Niuosha, 2023. "Goodwill or “No-will”: Hubris in the tone at the top," Journal of Contemporary Accounting and Economics, Elsevier, vol. 19(1).
    19. Sawssen Khlifi & Ghazi Zouari, 2021. "The Impact of CEO Overconfidence on Real Earnings Management: Evidence from M&A Transactions," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 20(3), pages 402-424, September.
    20. Ulrike Malmendier & Vincenzo Pezone & Hui Zheng, 2023. "Managerial Duties and Managerial Biases," Management Science, INFORMS, vol. 69(6), pages 3174-3201, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:67:y:2014:i:7:p:1414-1420. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.