Evaluation of Managerial Overconfidence, Cash Holding, and Investment Efficiency in Companies

Table 1

Variable definitions.

Variable	Symbol	Variable measurement and definitions
Cash holding	CASH	The ratio of cash plus short-term investments to the book value of assets
Investment efficiency	INVEFF	The inverse of the absolute value of the residuals () in the model presented by Biddle et al. [81]
Managerial overconfidence	MOC	A dummy variable; if the profit forecasted by the management is more than actual value, it takes one and zero otherwise
Firm size	SIZE	Natural logarithm of the book value of total assets
Tobin’s Q	Q	The total market value of equity plus debts is deflated by the book value of total assets
Financial leverage	LEV	Book value of total debts divided by total assets
Return on asset	ROA	The ratio of net profit after tax to book value of total assets
Earnings per share	EPS	Net profit after tax divided by a total number of shares issued
Operational cash flow	CF	The ratio of net operating cash flows to the book value of total assets
Ownership concentration	HHI	Measured by Herfindahl-Hirschman index taking values between zero and one; the larger the index, the higher ownership concentration