The Impact of Management Overconfidence on Value Creation and Stock Return Risk

Subject Areas : Journal of Investment Knowledge

Amir Faridnia ¹ , Behrooz Eskandarpoor ²

1 - Faculty member , management department, PAYAME NOOR university, 19395-4697, Tehran, Iran. (Corresponding Author)
2 - Faculty member , management department, PAYAME NOOR university, 19395-4697, Tehran, Iran

Received: 2017-08-04 Accepted : 2017-11-29 Published : 2019-09-23

Keywords: innovative companies, risk and stock returns, manager&amp, rsquo, s confidence,

Abstract :

This research investigate the impact of management over confidence ( on based two index of investment more than sales growth and profit tendentious prediction ) on value creation ( on based diversification indexes stock return involved stock maintains return , special and unusual risk ) and firm’s stock return risk in Tehran stock exchange . In general , the use of a sample of stock market companies between 1386 / 1395 suggests that there is a significant difference between the stock return of companies with over_ executives and companies that do not have such managers.  There is also no significant difference between the stock of innovative stock companies with the unconditional confidence of the management and other companies. also, there was no significant difference between the stock return of innovative companies with excessive management confidence and other companies. The results show that the exist once of management over confidence has a negative and significant effect on stock return risk and despite the excessive assurance of management (based on both of the criteria examined) Stock return risk has decreased significantly . the other result show that the status of innovative companies with excessive management confidence has not been able to have a significant effect the on stock return risk and there is a significant difference the return risk of innovative companies with excessive assurance management and other companies do not exist .    

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