The Impact Of CEO Overconfidence On Enterprise Innovation Performance

As the important foundation of enhancing soft power,innovation is a reliable pillar to drive Chinese economy to achieve high-quality development.Since the past 40 years of reform and opening-up,China has made great achievements in innovation development,which also provides an inexhaustible force for China's transition from "Made in China"to "Created in China".The enterprise is the main body of innovation and we find that there is a certain link between its level of innovation and CEO's personal psychological traits,such as overconfidence.Considering that over-confident CEOs usually have a strong risk appetite and risk-taking is propitious for enterprises to seize the opportunities of innovation,we speculate that the level of enterprise risk-taking will regulate the impact of CEO overconfidence on enterprise innovation performance.Most existing studies focus on the impact of CEO overconfidence on enterprise innovation performance or the relationship between enterprise risk-taking and enterprise innovation performance,but few articles directly discuss the influence mechanism of these three variables.Therefore,it is one of innovation points to study the moderating role of enterprise risk-taking in the relationship between CEO overconfidence and enterprise innovation performance.This paper measures CEO overconfidence by self-serving attribution that is based on Attribution Theory,and takes the panel data of Chinese GEM listed enterprises from 2014 to 2016 as samples.Firstly,this paper examines whether there is a significant linear relationship between CEO overconfidence and enterprise innovation performance,or between CEO overconfidence and enterprise risk-taking.Then,this paper explores that the moderating effect of enterprise risk-taking on the relationship between CEO overconfidence and enterprise innovation performance.In addition,this paper further verifies the robustness of the empirical results by changing the way to measure CEO overconfidence.Based on these,this paper draws three conclusions:In Chinese GEM listed enterprises,with the increase of CEO overconfidence level,enterprise innovation performance will significantly go up;The stronger CEO overconfidence is,the higher the level of enterprise risk-taking is;Enterprise risk-taking has a significant positive moderating effect on the relation between CEO overconfidence and enterprise innovation performance.According to these conclusions,this paper gives three practical suggestions for Chinese GEM listed enterprises:First,enterprises should pay attention to identifying the level of CEO overconfidence;Second,for CEOs with low level of overconfidence,enterprises should improve their innovation ability through appropriate training and incentives;Third,for CEOs with high level of overconfidence,enterprises can give full play to their positive role in innovation activities by moderately improving the level of risk-taking.Finally,the author prospects the direction of future researches on the basis of rethinking the limitations of this paper.