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Is an overconfident CEO good for advertising investments?

Author

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  • Ying-Jiuan Wong

    (Department of Business Administration, National Kaohsiung University of Applied Sciences, Kaohsiung, Taiwan)

  • Chi-Feng Wang

    (Department of International Business, National Kaohsiung University of Applied Sciences, Kaohsiung, Taiwan)

Abstract

In this study, we identify a link between CEO overconfidence and advertising investments by examining the specific impact overconfident CEOs have on stock market responses to new TV commercial announcements. Furthermore, we investigate whether family ownership moderates this relationship. Our results reveal a negative correlation between CEO overconfidence and stock market performance, and that family ownership magnifies this negative relationship. Our study thus highlights the role CEOs’ personal attributes have on influencing investors’ assessments of corporate advertising investments and reveals there is a potential for family ownership to intensify this negative relationship between CEO overconfidence and the market value of new advertising investments.

Suggested Citation

  • Ying-Jiuan Wong & Chi-Feng Wang, 2018. "Is an overconfident CEO good for advertising investments?," Australian Journal of Management, Australian School of Business, vol. 43(3), pages 439-455, August.
    • Handle: RePEc:sae:ausman:v:43:y:2018:i:3:p:439-455
    DOI: 10.1177/0312896217733307
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    More about this item

    Keywords

    Advertising investment; CEO overconfidence; family ownership; stock market reaction;
    All these keywords.

    JEL classification:

    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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