Table 7 Addressing selection bias using...

Table 7

Addressing selection bias using entropy balancing

	Treatment (overconfidence CEO = 1)			Control (rational CEO = 0)
	Mean	Variance	Skewness	Mean	Variance	Skewness
Panel A: pre-balancing first, second and third moments of control variables
CEOTen	4.374	13.540	1.084	2.920	8.357	2.246
CEOFinExpt	0.070	0.066	3.349	0.180	0.149	1.666
BInd	0.713	0.036	−0.333	0.598	0.029	−0.654
BFinExpt	0.161	0.020	0.791	0.192	0.019	0.415
InstOwn	0.663	0.035	−0.815	0.711	0.042	−1.520
Size	14.640	2.767	0.641	15.070	1.768	0.677
ROA	0.183	0.026	0.031	0.170	0.020	0.622
Accruals	0.037	0.035	3.664	0.085	0.031	0.710
Loss	0.111	0.099	2.475	0.040	0.038	4.695
SalesG	0.440	0.295	1.694	0.331	0.174	2.017
MTB	4.698	10.270	0.843	4.361	9.114	1.154
LnAge	3.606	0.126	−0.461	3.725	0.134	−0.821
ForeignS	0.676	0.221	−0.755	0.890	0.098	−2.493
Segment	0.343	0.227	0.659	0.500	0.252	0.000
Panel B: post-balancing first, second and third moments of control variables
CEOTen	4.374	13.540	1.084	2.950	8.250	2.200
CEOFinExpt	0.070	0.066	3.349	0.180	0.145	1.600
BInd	0.713	0.036	−0.333	0.600	0.028	−0.620
BFinExpt	0.161	0.020	0.791	0.190	0.018	0.400
InstOwn	0.663	0.035	−0.815	0.710	0.041	−1.450
Size	14.640	2.767	0.641	15.050	1.750	0.650
ROA	0.183	0.026	0.031	0.170	0.020	0.600
Accruals	0.037	0.035	3.664	0.085	0.030	0.700
Loss	0.111	0.099	2.475	0.040	0.037	4.650
SalesG	0.440	0.295	1.694	0.330	0.170	2.000
MTB	4.698	10.270	0.843	4.360	9.100	1.150
LnAge	3.606	0.126	−0.461	3.720	0.133	−0.800
ForeignS	0.676	0.221	−0.755	0.890	0.095	−2.450
Segment	0.343	0.227	0.659	0.501	0.250	0.011

	Treatment (overconfidence CEO = 1)			Control (rational CEO = 0)
	Mean	Variance	Skewness	Mean	Variance	Skewness
Panel A: pre-balancing first, second and third moments of control variables
CEOTen	4.374	13.540	1.084	2.920	8.357	2.246
CEOFinExpt	0.070	0.066	3.349	0.180	0.149	1.666
BInd	0.713	0.036	−0.333	0.598	0.029	−0.654
BFinExpt	0.161	0.020	0.791	0.192	0.019	0.415
InstOwn	0.663	0.035	−0.815	0.711	0.042	−1.520
Size	14.640	2.767	0.641	15.070	1.768	0.677
ROA	0.183	0.026	0.031	0.170	0.020	0.622
Accruals	0.037	0.035	3.664	0.085	0.031	0.710
Loss	0.111	0.099	2.475	0.040	0.038	4.695
SalesG	0.440	0.295	1.694	0.331	0.174	2.017
MTB	4.698	10.270	0.843	4.361	9.114	1.154
LnAge	3.606	0.126	−0.461	3.725	0.134	−0.821
ForeignS	0.676	0.221	−0.755	0.890	0.098	−2.493
Segment	0.343	0.227	0.659	0.500	0.252	0.000
Panel B: post-balancing first, second and third moments of control variables
CEOTen	4.374	13.540	1.084	2.950	8.250	2.200
CEOFinExpt	0.070	0.066	3.349	0.180	0.145	1.600
BInd	0.713	0.036	−0.333	0.600	0.028	−0.620
BFinExpt	0.161	0.020	0.791	0.190	0.018	0.400
InstOwn	0.663	0.035	−0.815	0.710	0.041	−1.450
Size	14.640	2.767	0.641	15.050	1.750	0.650
ROA	0.183	0.026	0.031	0.170	0.020	0.600
Accruals	0.037	0.035	3.664	0.085	0.030	0.700
Loss	0.111	0.099	2.475	0.040	0.037	4.650
SalesG	0.440	0.295	1.694	0.330	0.170	2.000
MTB	4.698	10.270	0.843	4.360	9.100	1.150
LnAge	3.606	0.126	−0.461	3.720	0.133	−0.800
ForeignS	0.676	0.221	−0.755	0.890	0.095	−2.450
Segment	0.343	0.227	0.659	0.501	0.250	0.011

Panel C. Models with entropy balancing weights
Variables	Complexity1		Complexity2		Complexity3
Variables	Coef	t-stat	Coef	t-stat	Coef	t-stat
CEOOC	0.342***	3.624	0.294***	3.754	0.437***	3.275
Intercept	Yes		Yes		Yes
Controls	Yes		Yes		Yes
YEAR_FE	Yes		Yes		Yes
IND_FE	Yes		Yes		Yes
Adj_R²	0.213		0.224		0.178
F	3.121***		3.324***		3.106***
Observations	1,445		1,445		1,445

Panel C. Models with entropy balancing weights
Variables	Complexity1		Complexity2		Complexity3
Variables	Coef	t-stat	Coef	t-stat	Coef	t-stat
CEOOC	0.342***	3.624	0.294***	3.754	0.437***	3.275
Intercept	Yes		Yes		Yes
Controls	Yes		Yes		Yes
YEAR_FE	Yes		Yes		Yes
IND_FE	Yes		Yes		Yes
Adj_R²	0.213		0.224		0.178
F	3.121***		3.324***		3.106***
Observations	1,445		1,445		1,445

Note(s): Statistical significance is denoted by *p < 0.10, **p < 0.05, ***p < 0.01. Variables are as defined in Appendix 2

Source(s): Author’s own creation

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