本研究主要探討台灣上市櫃公司，經理人持股與股利政策間關係是否受到經理人過度自信影響。實證結果顯示，經理人持股與股利支付之間呈現非單調線性關係。重要的是，經理人過度自信影響經理人持股與股利政策之間的非單調線性關係。縱使經理人持股足以有效控制公司，並藉由調降股利而掠奪股東利益，然而過度自信經理人因高估公司未來的現金流入及展望，調降股利的意圖相對低於非過度自信者，故股利調降幅度相對較小。此外持股偏高下，經理人透過高額股利以降低投資過度集中的風險，但過度自信經理人高估個人能力、公司投資計畫的價值，甚至低估投資風險，選擇保留公司盈餘以應付公司未來的資金需求。故股利支付隨著持股增加的幅度，相對低於非過度自信經理人。最後本研究證實經理人過度自信能夠減緩因經理人地位鞏固所造成股利調降的利益掠奪效果。

This paper examines whether the relationship between management ownership and dividend policies is subject to the influence of managerial overconfidence among listed companies in Taiwan. The empirical study suggests a non-linear relationship between management ownership and dividend payouts. Most importantly, this study finds that managerial overconfidence affects the non-monotonic linear relationship between management ownership and dividend payout policies. Even when management ownership is sufficient to effectively control the company and managers seek to expropriate the shareholders’ interests by reducing payouts, overconfident managers will have a weaker intention to reduce payouts than non-overconfident managers because overconfident managers overestimate future cash flows and prospects. Whilst managers may resort to high payouts to reduce the risk of wealth concentration due to high management ownership, overconfident managers will overestimate their personal capabilities and project values or even underestimate investment risks. As a result, they choose to retain earnings to meet future capital needs. The rate with which payouts increase along with ownership is lower for overconfident managers than for non-overconfident managers. Finally, this paper shows that managerial overconfidence lessens the entrenchment effects due to the strengthened position of managers and the resulting payout reductions.

This study shows that managers who own few shares tend to win the support of external shareholders and secure their positions by issuing more dividends. However, managers reduce dividend payout as their cash flow rights increase when they hold sufficient cash flow rights to effectively control the firms’ decision. It indicates the misappropriation of shareholders’ wealth due to entrenchment effects. Furthermore, dividends increase with management ownership when managers hold higher level of cash flow rights because managers diversify their investment risk and avoid asset concentration. Most importantly, this paper demonstrates that overconfident managers reduce the fewer dividend payouts than non-overconfident managers. In other words, managerial overconfidence can mitigate the adverse effects of entrenchment on shareholders’ wealth. Moreover, overconfident managers prone to overestimate their ability and investment project values and even underestimate risks, and choice to retain earnings. Therefore, overconfident managers with high ownership tend to pay fewer dividends than non-overconfident managers. Thus, this study can enrich dividend payout policy with respect to management ownership and explains how managerial overconfidence can be expected to behave. This paper further contributes to management practice. With respect to the management implications, managers tend to make corporate policy for their own interests. Meanwhile, managerial overconfidence makes managers who own moderate level of ownership to pay out more dividends. Moreover, this paper suggests that practitioners, investors, and authorities take management ownership into consideration when evaluating dividend policy since the level of management ownership has different effect on dividend payout. Furthermore, the relationship between management ownership and dividend policies depends on the presence of managerial overconfidence. Managerial overconfidence lessens the adverse effects of entrenchment on shareholder wealth. Finally, this paper suggests that investors should incorporate managerial overconfidence and management ownership to their evaluation of stock investment in Taiwan. These empirical results can also assist authorities in the development of laws to protect minority shareholders.

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