Title: Exploring the relationship between managerial overconfidence and investment efficiency in the US hospitality industry

Authors: Yasmine Souissi; Anis Jarboui

Addresses: Faculty of Economic Sciences and Management of Sfax, Sfax University, BP 1013, Tunisia ' Faculty of Economic Sciences and Management of Sfax, Sfax University, BP 1013, Tunisia

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.

Keywords: investment efficiency; under-investment; over-investment and managerial overconfidence; hospitality industry.

DOI: 10.1504/IJSEM.2024.140937

International Journal of Services, Economics and Management, 2024 Vol.15 No.5, pp.455 - 478

Received: 10 Feb 2022
Accepted: 17 Mar 2023
Published online: 04 Sep 2024 *

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