Overconfident CEOs, corporate cash holdings and firm value: empirical evidence in listed companies in Vietnam

Abstract

This study aims to investigate the impact of corporate cash holdings on firm value with the moderating role of overconfident CEOs. The research was conducted based on the data analysis of 853 Vietnamese enterprises listed on the Ho Chi Minh City Stock Exchange (HOSE), Hanoi Stock Exchange (HNX) and the Unlisted Public Company Market (UPCOM) in the period 2012 - 2022. We find that there is a non-linear relationship between corporate cash holdings and firm value, overconfident CEOs have a positive impact on corporate cash holdings. Moreover, overconfident CEOs increase the impact of corporate cash holdings, which negatively affects firm value. The study not only contributes to the existing literature on overconfident CEOs and firm value but also assists policymakers and investors in making efficient decisions. In addition, the empirical research results serve as a valuable reference in selecting managers.