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Overconfidence or competence? Your employees know

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  • Kim, Jonghwan (Simon)
  • Jeon, Heung-Jae
  • Kim, Grace Goun

Abstract

We examine the moderating effect of employees’ ratings of their CEOs on the relation between CEO overconfidence and firm value. Obtaining the employees’ CEO approval data from Glassdoor, we test the hypothesis that CEO overconfidence with a high approval rating is associated with higher Tobin’s Q. Our finding supports the hypothesis and suggests that employees can tell the type of CEO overconfidence (competence-based vs. mere optimism-based).

Suggested Citation

  • Kim, Jonghwan (Simon) & Jeon, Heung-Jae & Kim, Grace Goun, 2022. "Overconfidence or competence? Your employees know," Economics Letters, Elsevier, vol. 216(C).
    • Handle: RePEc:eee:ecolet:v:216:y:2022:i:c:s0165176522001707
    DOI: 10.1016/j.econlet.2022.110580
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    References listed on IDEAS

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    Cited by:

    1. Kim, Jonghwan (Simon) & Ra, Kyeongheum, 2022. "Employee satisfaction and asymmetric cost behavior: Evidence from Glassdoor," Economics Letters, Elsevier, vol. 219(C).

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    More about this item

    Keywords

    Overconfidence; Tobin’s Q; Competence; Employee rating; CEO approval;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General

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