Research On The Relationship Between CEO Overconfidence, Entrepreneurial Orientation And Innovation Performance

In the dynamic environment,more and more overconfidence executives play a much more important role in corporate innovation and entrepreneurship.Scholars believe that CEO overconfidence may influence corporate innovation.However,the impact of CEO overconfidence on entrepreneurial orientation still remains unexplored.Meanwhile,how CEO overconfidence may influence innovation performance is still not clear.Besides,The moderating roles of environmental dynamics on the relation ship between CEO overconfidence and innovation performance are also neglected.Based on the upper echelons theory,stewardship theory,resource based theory and contingency theory,this paper introduced the concept of entrepreneurial orientation to investigate the indirect mechanism between CEO overconfidence and innovation performance.Moreover,this paper examines the moderating effects of environmental dynamics on the relationship between CEO overconfidence and innovation performance.Taking the date of China listed companies on Growth Enterprise Market from 2012 to 2014 as samples,using the software of STATA,the independent-samples T test,OLS regression analysis method for controlling industry and annual fixed effect,Bootstrap to test related mediating mechanism and moderating effects testing method to test the hypotheses.The empirical results show that: CEO overconfidence has a significant positive effect on entrepreneurial orientation and innovation performance,entrepreneurial orientation has a significant positive effect on innovation performance,and entrepreneurial orientation partly mediates the relationship between CEO overconfidence and innovation performance.Furthermore,environmental dynamics significantly moderates the relationship between CEO overconfidence and innovation performance.The robustness tests show that the conclusion are still valid after considering the alternative measurements of variables,the fixed effect and random effect.This paper adds to the small but growing studies on the economic consequences of CEO overconfidence.This paper also found the mediation mechanism which underline the relationship between overconfidence and innovation,and deepen our standing on the relationship between CEO overconfidence and innovation performance.Moreover,this paper identifies the boundary conditions of CEO overconfidence affect innovation performance,enriches the literature of theirs on the view of contingency theory.At the same time,these conclusions also provide theoretical guidance for employing and developing top executives,improving innovation performance,and clarifying the relationship between environmental dynamics and corporate innovation.