Research Article
How Overconfidence Effect Value Creation of a Firm? Evidence from Moderating Role of Dividend Policy in Indonesia
@INPROCEEDINGS{10.4108/eai.4-11-2022.2328196, author={Emma Suryani and Enok Nurhayati and Yeni Januarsi}, title={How Overconfidence Effect Value Creation of a Firm? Evidence from Moderating Role of Dividend Policy in Indonesia}, proceedings={Proceedings of the International Conference on Sustainability in Technological, Environmental, Law, Management, Social and Economic Matters, ICOSTELM 2022, 4-5 November 2022, Bandar Lampung, Indonesia}, publisher={EAI}, proceedings_a={ICOSTELM}, year={2023}, month={9}, keywords={managerial overconfidence firm value dividend policy pooled ordinary least square clustered by firm}, doi={10.4108/eai.4-11-2022.2328196} }- Emma Suryani
Enok Nurhayati
Yeni Januarsi
Year: 2023
How Overconfidence Effect Value Creation of a Firm? Evidence from Moderating Role of Dividend Policy in Indonesia
ICOSTELM
EAI
DOI: 10.4108/eai.4-11-2022.2328196
Abstract
The moderating effect of dividend policy on the relationship between Managerial Overconfidence and Firm Value is investigated in this study. We use 4092 samples from 2010 to 2020 to investigate how dividend policy affects the link between managerial overconfidence and firm value in the Indonesia Capital Market. We use the Pooled Ordinary Least Square Clustered by Firm to examine the proposed hypothesis. We find that management overconfidence has negative impact on firm value, reducing the value of the business. Furthermore, we believe that the dividend policy reduces the impact of managerial overconfidence, increasing the company's value. This research contributes to the advancement of financial management literature as well as managers' considerations when making dividend policy decisions that affect firm value.