Do CEO overconfidence and demographic characteristics moderate the effect of R&D investment on firm performance?

Purpose - This paper aims to examine the influence of overconfident or conservative CEOs on the performance feedback of R&D investment, as well as the combined impact of CEO overconfidence and demographic characteristics on the relationship between performance feedback of R&D investments. Design/methodology/approach - Grounded in the upper echelon theory, listed companies in China are selected as samples, and the Heckman two-stage model is used to examine all the models. Findings - This paper reveals that overconfident CEOs tend to make suboptimal investment decisions. These decisions are influenced by cognitive biases that have a negative impact on the performance of R&D investments. However, the negatively moderating effects of CEO overconfidence can be mitigated if they have overseas experience or academic background, or they are younger. Originality/value - These mechanisms highlight the various ways in which CEO psychological factors and demographic characteristics can complement each other.