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SUMMARY:Optimism in the Executive Team: Corporate Asset Transactions and S
 tock Performance - Piet Eichholtz (Maastricht University) 
DTSTART:20201029T130000Z
DTEND:20201029T140000Z
UID:TALK150277@talks.cam.ac.uk
CONTACT:CERF/CF Admin
DESCRIPTION:The literature regarding the effects of managerial optimism co
 ncentrates on CEOs\, all but neglecting the broader executive team. We eva
 luate the interplay of the optimism levels of the CEOs and CFOs of listed 
 real estate investment trusts\, and study the commercial real estate trans
 actions made by the firms led by these teams. We find that firms led by op
 timistic executive teams pay 2.7% more than their peers for their private 
 asset acquisitions if the cash ratio increase by one percentage point. The
 se firms also exhibit inferior stock performance following their asset acq
 uisitions. Conversely\, diverse opinions in the boardroom prevent firms fr
 om overpaying on their asset transactions\, improving their stock performa
 nce relative to optimistic teams. Our findings suggest that diversity in t
 erms of executive optimism is a soft governance mechanism with salience to
  firm performance.
LOCATION:Online
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