CEO Overconfidence Cash Flow and Corporate Investment Decision：Evidence from Taiwan Listed Companies

Abstract

This paper explores whether there is a positive relation between investment expenditure and cash flow in Taiwan and further explores whether the characteristic of managerial overconfidence can strengthen the positive relation We analyze a sample of 754 publicly traded firms from 2014 to 2018 with 3 770 observations Compared to prior literature this paper defines two kinds of cash flows operating cash flow and free cash flow respectively to conduct empirical research According to the empirical results there are positive relation between investment expenditure and both cash flows in Taiwan However not as predicted by our hypothesis and prior literature the characteristic of managerial overconfidence does not strengthen the positive impacts of both cash flows on investment expenditure In summary the same phenomenon may not exist in every area and thus there may be other factors that have impacts on the investment-cash flow sensitivity in Taiwan

Date of Award	2020
Original language	English
Supervisor	Hsuan-Chu Lin (Supervisor)