This paper studies whether banks charge higher or lower interest rates on loans to firms with overconfident CEOs. It establishes a theoretical model to show the relationship between the loan rate and overconfidence of the borrowing firm's CEO. It also conducts empirical analyses to test the...

This paper studies whether banks charge higher or lower interest rates on loans to firms with overconfident CEOs. It establishes a theoretical model to show the relationship between the loan rate and overconfidence of the borrowing firm's CEO. It also conducts empirical analyses to test the...

We study whether bank CEO optimism (optimistic bank) plays a role in technological progress. We find that optimistic banks lend more to smaller/riskier firms and charge higher loan spreads to compensate for the higher risk exposures. More interestingly, these optimistic banks prefer lending to...

We show that firms with a skillful management team tend to disclose more accounting information than other comparable firms. We explore several channels to explain this finding. First, we find that investors treat the disclosure of skillful management team as more credible. In particular,...

Using religious festivals in Taiwan as repeated natural experiments, we examine whether the religious beliefs of individual investors influence their trading behaviors. Based on the assumption that religious festivals draw superstitious individual investors participating and make them feel lucky...

We identify the endogenous social effects proposed by Manski (1993) in firm R&D spending. By using state-level Uniform Trade Secrets Act (UTSA) enactments as exogenous shocks, we find that focal firms respond positively to peers' R&D expenditure. The results suggest that managerial learning and...