NDLI: Effect of Managerial Overconfidence and Compensation on Share Repurchase: Empirical Evidence from Taiwanese Firms

Please wait, while we are loading the content...

Effect of Managerial Overconfidence and Compensation on Share Repurchase: Empirical Evidence from Taiwanese Firms

Content Provider	Semantic Scholar
Author	Liu, Tzu-Yu Liu, Lilun Diaz, John Francis T.
Copyright Year	2016
Abstract	This study analyses the effect of managerial overconfidence and compensation on the behaviour of Taiwanese CEOs who execute share repurchase. A panel data of 715 companies listed in Taiwan Stock Exchange Corporation and over-the-counter from 2008 to 2012 are used for the analysis. Results show that the managers who receive short-term performance bonuses and equity incentives tend to repurchase shares, and these bonuses and incentives are increased when the managers overly estimate the prospects of the company. Overconfident managers are also inclined to use additional capital in buying back shares, especially when they are under a profit-sharing scheme and have additional stock option incentives. The research findings are robust and provide strong policy implications, which advise the board of directors to improve their checks and balances, minimise costly managerial decisions, determine the motives of CEOs in implementing share buybacks, and lessen the information asymmetry inside and outside their business organisations. This study also suggests that future research should look into the tendency of Taiwanese managers to select types of financing (i.e., debt, equity, or a mix) or establish business empires through mergers and acquisitions. Other than the private sector, the case of government-owned and -controlled corporations should also be investigated.
Starting Page	153
Ending Page	179
Page Count	27
File Format	PDF HTM / HTML
DOI	10.21315/aamjaf2016.12.2.7
Volume Number	12
Alternate Webpage(s)	http://web.usm.my/journal/aamjaf/vol%2012-1-2016/aamjaf120116_07.pdf
Language	English
Access Restriction	Open
Content Type	Text
Resource Type	Article

Central Library (ISO-9001:2015 Certified)
Indian Institute of Technology Kharagpur
Kharagpur, West Bengal, India | PIN - 721302

See location in the Map
03222 282435
Mail: support@ndl.gov.in

Sl.	Authority	Responsibilities	Communication Details
1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
3	National Digital Library of India Office, Indian Institute of Technology Kharagpur	The administrative and infrastructural headquarters of the project	Dr. B. Sutradhar bsutra@ndl.gov.in
4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
5	Website/Portal (Helpdesk)	Queries regarding NDLI and its services	support@ndl.gov.in
6	Contents and Copyright Issues	Queries related to content curation and copyright issues	content@ndl.gov.in
7	National Digital Library of India Club (NDLI Club)	Queries related to NDLI Club formation, support, user awareness program, seminar/symposium, collaboration, social media, promotion, and outreach	clubsupport@ndl.gov.in
8	Digital Preservation Centre (DPC)	Assistance with digitizing and archiving copyright-free printed books	dpc@ndl.gov.in
9	IDR Setup or Support	Queries related to establishment and support of Institutional Digital Repository (IDR) and IDR workshops	idr@ndl.gov.in