Managerial Overconfidence and Share Repurchases

Pei Gi Shu*, Yin-Hua Yeh, Tsui Lin Chiang, Jui Yi Hung

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

17 Scopus citations


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.

Original languageEnglish
Pages (from-to)39-65
Number of pages27
JournalInternational Review of Finance
Issue number1
StatePublished - 1 Mar 2013

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