Overconfidence in SMEs (eBook)

Anna Chiara Invernizzi is Assistant Professor of Business Administration at University of Eastern Piedmont Amadeo Avogadro, Italy. Her main research interests concern family businesses and local economic development. Her work has appeared, among other journals and monographs, in the International Small Business Journal.

Foreword 5
Acknowledgements 10
Contents 11
List of Figures 12
List of Tables 13
Introduction 14
1 Managerial Overconfidence 17
Abstract 17
1.1Behavioral Finance and Cognitive Bias 18
1.2The Approach of Big Five Model 20
1.3The Behavioral Business Finance 21
1.4The Beginning of Overconfidence: The Stock Markets 27
1.5Overconfidence in the Management Area 29
1.6Overconfidence in Small and Medium Enterprises 30
References 34
2 Managerial Overconfidence of Entrepreneurs: Contextual Explanations and the Aid of Technological Developments 37
Abstract 37
2.1Introduction 38
2.2Literature Review 40
2.2.1Overconfidence 40
2.2.2What Factors Could Lead to a Situation of Business Failure in SMEs 41
2.2.3Identify a Proxy to Recognize an Entrepreneur’s Overconfident Attitude 45
2.3Hypotheses 46
2.4Research Method: Empirical Analysis to Test Overconfidence 47
2.4.1Data 47
2.4.2Sample 49
2.5Analysis and Results 49
2.5.1The Three Major Dependent Variables: EBITDA, Equity, and Borrowing Costs 49
2.5.2The Incidence of Independent Variables 51
2.6Discussion and Conclusion 55
References 59
3 Level of Confidence of Male and Female Youth Soccer Players: On Detecting a False Underconfidence 66
Abstract 66
3.1Introduction 67
3.2Theoretical Framework and Hypotheses 68
3.3Study 1 71
3.3.1Participants 71
3.3.2Procedure and Design 71
3.3.3Results and Discussion 73
3.4Study 2 75
3.4.1Participants 75
3.4.2Procedure and Design 76
3.4.3Results and Discussion 76
3.5General Discussion 78
3.6Conclusion 79
3.7Extension in Other Domains 80
References 83
4 Closing Remarks on Overconfidence in Business and Beyond 87
Abstract 87
4.1The Epilogue 88
References 91
Index 93