경영자의 과신성향과 자발적 예측공시

Abstract

[Purpose]Managers’ personal characteristics play an important role in corporate decision－making. Overconfidence, one of the personal characteristics of managers, refers to the tendency to overestimate managers’ own abilities and the probability of positive events happening to them. Therefore, overconfident CEOs are likely to overestimate the returns to their investment projects and to misperceive a negative net present value project as value creating. This study, therefore, examines whether overconfident CEOs are more likely to issue a management forecast. We also investigate whether CEO overconfident is related to the accuracy of forecast.
 [Methodology]Our sample consists of 6,310 firm－year observations of firms listed on the Korean Composite Stock Price Index (KOSPI) market of the Korea Exchange (KRX) for the period from 2003 to 2015. We measure CEO overconfidence using empirical measure that has been developed by Ahmed and Duellman (2013) and Schrand and Zechman (2012).
 [Findings]We find that CEO overconfidence is positively associated with the likelihood of issuing a management forecast. In addition, we find that overconfidence is negatively related to the accuracy of management forecasts. These findings imply that overconfident CEOs are more likely to issue a management forecast and that their forecasts are less accurate.
 [Implications]Our study contributes to our understanding of why some managers voluntarily issue forecasts while others do not. The result of this study implies that overconfidence, among the personal characteristics of managers, affects the motivation for voluntary management forecasts. In addition, the result that overconfident CEOs issue less accurate forecasts supports prior studies that CEO overconfidence is a potential factor that can hinder the optimal corporate decision－making.