산업특성이 경영자의 낙관적 성향과 경영성과의 관계에 미치는 영향

The purpose of this study is to test whether industry characteristics affect the relation between managerial overconfidence and firm performance. Prior literature argues that managerial overconfidence may spoil financial performance of firm. However, to the best of our knowledge, those studies are not likely to consider various industrial effects in their empirical settings. With respect to industry characteristics, different styles of decision making are necessary for firms. Specifically, careful and discreet decision making processes are encouraged for firms confronting high competitive intensity due to the higher probability of failure. By the way, aggressive and belligerent decision making processes are suitable for firms experiencing industry and market growth. In this study, we exploit three proxies of managerial overconfidence which are prevalent in prior studies. Our final sample consists of 6,426 in period of 2000－2015. We find negative and significant relation between managerial overconfidence and future performance in the highly competitive industry sample. However, we find positive and significant relation between managerial overconfidence and future performance in the growing industry sample. It suggests that, firms are likely to behave more cautiously to avoid failure in decision making when the competitive intensity is high. Meanwhile, firms have tendency to make rapid steps forward when the industry is growing where innovation and managerial overconfidence is more important. This study extends our understanding of the relation between managerial overconfidence and firm performance by considering industry characteristics additionally in the empirical settings. Also, this study suggests that it is necessary for firms to assess both industrial environments and personality of the candidates when they appoint the executives.