TY  - JOUR
AU  - Malmendier,Ulrike
AU  - Tate,Geoffrey
AU  - Yan,Jonathan
TI  - Overconfidence and Early-life Experiences: The Impact of Managerial Traits on Corporate Financial Policies
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15659
PY  - 2010
Y2  - January 2010
UR  - http://www.nber.org/papers/w15659
L1  - http://www.nber.org/papers/w15659.pdf
N1  - Author contact info:
Ulrike Malmendier
Department of Economics
549 Evans Hall # 3880
University of California, Berkeley
Berkeley, CA 94720-3880
Tel: 510-642-5038
E-Mail: ulrike@econ.berkeley.edu

Geoffrey Tate
Finance Department - Rm C420
UCLA Anderson School of Management
110 Westwood Plaza
Los Angeles, CA  90095
Tel: 310-825-3544
E-Mail: geoff.tate@anderson.ucla.edu

Jonathan Yan
Graduate School of Business
518 Memorial Way
Stanford University
Stanford , CA 94305
E-Mail: jonathan.yan@stanford.edu
AB  - We show that measurable managerial characteristics have significant explanatory power for corporate financing decisions beyond traditional capital-structure determinants. First, managers who believe that their firm is undervalued view external financing as overpriced, especially equity. Such overconfident managers use less external finance and, conditional on accessing risky capital, issue less equity than their peers. Second, CEOs with Depression experience are averse to debt and lean excessively on internal finance. Third, CEOs with military experience pursue more aggressive policies, including heightened leverage. Complementary measures of CEO traits based on press portrayals confirm the results.
ER  -