Ceo Overconfidence and the Environmental Pollutions(1/2)

The research proposal is a two-year project – it focuses on the relation between overconfident CEOs and the environmental pollutions. The climate risks these days have impacted human beings a lot that has made people pay more attention to corporate environmental responsibility. Although the environmental pollutions cause negative externalities, we consider that overconfident CEOs would ignore this negative impact. Moreover, being responsible for corporate social activities would have the hedge effect, but due to overconfident CEOs’ strong belief in themselves about their management abilities, they are less likely to risk management or hedge and pay less attention to corporate social responsibility and environmental issues.In the first year, we investigate whether overconfident CEOs would relate to more carbons dioxide and greenhouse gas emission and environmental fines. We consider that CEO overconfidence would positively associated with carbons dioxide and greenhouse gas emission and environmental fines. In addition, this effect would strengthen when firms face less financial constraint and this effect would weaken when firms face have better governance structure.In the second year, we further examine importance of environmental issue for overconfident CEOs. We argue that overconfident CEOs are less likely to disclose carbon dioxide and greenhouse gas emission or join the environmental program. Furthermore, we also examine whether CEO overconfidence is related to environmental proposes raised by the shareholders, i.e., the shareholders ask to reveal carbon emissions, reduce carbon emissions or adopt the environmental practice. We consider that the likelihood of overconfident CEOs receiving the environmental proposal which proposed by shareholder is positive.