Cash Holding Decision from Managerial Overconfidence and its Effect on Firm Performance

Paper Details

Authors: Dao N.T.T.

DOI: 10.26794/2587-5671-2026-30-2-1650-01

Journal: Finance: Theory and Practice

Year: 2026

Publisher: Financial University under The Government of Russian Federation

Document Type: Article

Open Access: All Open Access; Gold Open Access; Green Open Access

Cited by: 0

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. © Dao N.T.T., 2024.

Keywords

cash holdings; corporate finance; firm performance; firm value; managerial optimism; managerial overconfidence; overconfident manager; Vietnam

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