Impact of overconfidence on capital structure: evidence in Brazil and the United States


  • Ingrid Laís de Sena Costa Universidade Federal do Tocantins - UFT
  • Thamirys de Sousa Correia Universidade Federal da Paraíba UFP
  • Wenner Glaucio Lopes Lucena Universidade Federal da Paraíba


Manager profile, Overconfidence, Capital structure.


According to behavioral finances, decisions made by individuals are not always entirely rational, these individuals may be influenced by psychological factors such as biases and heuristics. In this sense, the objective of this article is to verify how the managers' overconfidence can interfere in the decisions of the capital structure of the organization, both in the Brazilian market and in the North American market. The sample selected is composed of 100 Brazilian companies listed in B3 and 77 US companies listed on the NYSE. The data were collected with the help of the Thomson Reuters Eikon® and Comdinheiro platforms, and through the reports posted on the companies' websites. The analysis was done for the period from 2010 to 2015, and counted on a panel data analysis in which multiple regression models were applied, considering an index of overconfidence, levels of overconfidence: overprecision, overestimation and the overplacement, and based on the profile of managers. The results obtained evidenced a significant relationship between overconfidence and capital structure decisions in both Brazilian and North American companies, and as the level of overconfidence increased, the impact on leverage also increased. It was also noticed a greater impact of this behavioral bias on the decisions made by managers of companies of the United States, allowing to conclude that behavioral issues, directed to the profile of the individuals also has its impact on the organizational decisions.

Author Biographies

Ingrid Laís de Sena Costa, Universidade Federal do Tocantins - UFT

Mestra pelo Programa de Pós-graduação em Ciências Contábeis da Paraíba da Universidade Federal da Paraíba - UFPB. Professora Assistente da Universidade Federal do Tocantins.

Thamirys de Sousa Correia, Universidade Federal da Paraíba UFP

Mestra pelo Programa de Pós-graduação em Ciências Contábeis da Paraíba da UFPB

Wenner Glaucio Lopes Lucena, Universidade Federal da Paraíba

Doutor em Ciências Contabeis pela UFPB/UFRN/UNB. Professor Adjunto da Universidade Federal da Paraíba.