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“Of Course I Can”: The Effect of CEO Overconfidence on Entrepreneurially Oriented Firms


  • The authors would like to thank the editor James O. Fiet and two anonymous reviewers for their helpful thoughts and comments during the development of this manuscript.


Guided by the upper echelons theory, this research examines the relationship between chief executive officer (CEO) overconfidence and a firm's entrepreneurial orientation (EO). The study theoretically establishes and empirically validates an increasing effect of CEO overconfidence on EO, although at a decreasing rate. Empirical results are based on a multisource secondary data set for high-tech S&P 500 firms from 2005 to 2007. Findings further indicate that the proposed relationship between CEO overconfidence and EO is moderated by market dynamism. A theoretically established moderating effect of market concentration could not be validated empirically.