Cash Holding Decision from Managerial Overconfidence and its Effect on Firm Performance
https://doi.org/10.26794/2587-5671-2026-30-2-1650-01
Abstract
Managerial overconfidence significantly influences firm performance. The main purpose of this research is how to find the impact of managerial overconfidence along with cash holding decision might be more negatively serious on firm performance. An empirical study is conducted on a sample of 648 firms listed in the Vietnam stock market. The research predicts that the higher the level of managerial overconfidence, the greater the risk and likelihood of loss in firm value, especially with inappropriate cash holding decision. Finally, the empirical results reveal a positive correlation between managerial overconfidence and firm value. However, firms characterized by both managerial overconfidence and low cash holdings tend to exhibit poorer performance compared to others. Those results are satisfied the purpose of the research.
Keywords
cash holdings,
corporate finance,
managerial overconfidence,
overconfident manager,
managerial optimism,
firm performance,
firm value,
Vietnam
JEL: G30, G32, G41
About the Author
N.T.T. Dao
VNU University of Economics and Business, Vietnam National University
Viet Nam
Competing Interests:
Viet Nam
Nhung Thi Tuyet Dao — PhD, Senior Lecturer, Faculty of Banking and Finance
Hanoi
Competing Interests:
The author has no conflicts of interest to declare.
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Review
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Dao N. Cash Holding Decision from Managerial Overconfidence and its Effect on Firm Performance. Finance: Theory and Practice. https://doi.org/10.26794/2587-5671-2026-30-2-1650-01
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