Abstract
This study identifies that CEO characteristics can drive overinvestment to superior ROA and stock return. We employ data from Glassdoor.com, a total of 755,541 reviews, to measure the CEO's characteristics. We find that, if CEOs are approved by their employees, overinvestment can spur firm development and boost future stock premiums. To address endogeneity concerns, we use the Fama-MacBeth regression and various standards for selecting valid reviews as a robustness test, yielding consistent results. Our results emphasize that overinvestment should be perceived as an investment style but not a reckless investment, and the impact depends on the CEO's capability and morality.
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