CEO overconfidence and forecast accuracy moderated by CEOs' accounting-based attributes

Abstract

Purpose

The purpose of this paper is to focus on the moderating effect of CEO's accounting-based attributes on the relationship between chief executive officer (CEO) overconfidence and forecast accuracy in European companies.

Design/methodology/approach

Data from a sample of 347 European firms listed on Stoxx Europe 600 index from 2005 to 2018 are used to test the moderation model using moderation regression analysis.

Findings

Evidence reveals that CEO overconfidence is negatively associated with forecast accuracy. Further, CEO's accounting-based attributes significantly moderates the impact of CEO overconfidence on forecast quality.

Originality/value

This study is unique in providing European evidence for the moderating effect of CEO's accounting-based attributes on the relationship between CEO overconfidence and forecast quality. This paper is also relevant as it addresses the interaction between two sciences (psychology) to explain the forecast accuracy (accounting).

Citation

Ben Ahmed, F. and Jarboui, A. (2022), "CEO overconfidence and forecast accuracy moderated by CEOs' accounting-based attributes", Journal of Management Development, Vol. 41 No. 3, pp. 163-182. https://doi.org/10.1108/JMD-08-2021-0236