Exploring the relationship between managerial overconfidence and investment efficiency in the US hospitality industry
by Yasmine Souissi; Anis Jarboui
International Journal of Services, Economics and Management (IJSEM), Vol. 15, No. 5, 2024

Abstract: This paper aims to investigate the influences of the different levels of managerial overconfidence on the investment efficiency (overinvestment and underinvestment) in the context of the hospitality industry. Employing 598 firm-year observations obtained from annual reports and supplementary databases, we use the generalised method of moments (GMM) regression method to estimate the relationship between managerial overconfidence and investment efficiency. This study demonstrates empirically that an over-invested firm with a CEO that has a low level of managerial overconfidence is not found to effectively improve the firm's investment efficiency by reducing the level of over investment in the US hospitality industry.

Online publication date: Wed, 04-Sep-2024

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