TY - JOUR
T1 - Managerial Overconfidence and Share Repurchases
AU - Shu, Pei Gi
AU - Yeh, Yin-Hua
AU - Chiang, Tsui Lin
AU - Hung, Jui Yi
PY - 2013/3/1
Y1 - 2013/3/1
N2 - Following prior studies, we use keywords in press portrayals to gauge managerial overconfidence. We hypothesize that managerial overconfidence is related to a manager's perception that the firm is undervalued. Results from 2744 share repurchase programs launched by 783 listed firms in Taiwan confirm this hypothesis. We find that managerial overconfidence is positively correlated with the intensity of share repurchasing, which is measured by scale, execution, frequency, and the difference between the announced price and post-execution price. Moreover, the programs launched by overconfident managers were not undervalued and therefore were associated with reduced post-announcement returns.
AB - Following prior studies, we use keywords in press portrayals to gauge managerial overconfidence. We hypothesize that managerial overconfidence is related to a manager's perception that the firm is undervalued. Results from 2744 share repurchase programs launched by 783 listed firms in Taiwan confirm this hypothesis. We find that managerial overconfidence is positively correlated with the intensity of share repurchasing, which is measured by scale, execution, frequency, and the difference between the announced price and post-execution price. Moreover, the programs launched by overconfident managers were not undervalued and therefore were associated with reduced post-announcement returns.
UR - http://www.scopus.com/inward/record.url?scp=84874731349&partnerID=8YFLogxK
U2 - 10.1111/j.1468-2443.2012.01162.x
DO - 10.1111/j.1468-2443.2012.01162.x
M3 - Article
AN - SCOPUS:84874731349
VL - 13
SP - 39
EP - 65
JO - International Review of Finance
JF - International Review of Finance
SN - 1369-412X
IS - 1
ER -