Purpose: The purpose of this study is to analyze the impact of overconfident managers on corporate social responsibility (CSR) of companies.

The purpose of this study is to analyse the impact of overconfident managers on corporate social responsibility (CSR) and to understand whether overconfident managers are innovative or overinvested in CSR activities.

Methodology/Methodology: This paper uses an option-compliant behaviour approach as a measure of managerial overconfidence and establishes a score to measure the performance of companies engaging in innovative CSR.

Findings: Firstly, companies with overconfident managers are more likely to engage in CSR activities. Secondly, overconfident managers who engage in CSR have a negative impact on the long-term performance of the company. Third, highly overconfident managers who focus their social responsibility on environmental issues, product innovation and other CSR activities can increase their company's performance.

Limitations/Insights: This study only considers the extent of managerial overconfidence as measured by the option to perform behaviours, and does not use another measure of overconfidence that is often used in the literature (CEOs' performance in the media).

Theoretical/Practical/Social Implications: Highly overconfident managers can improve their company's performance through innovative CSR activities.

Innovation/value: CSR activities that encourage innovation and focus on environmental issues, product innovation, etc. can be used by overconfident managers to not only realise the spirit of CSR sustainability, but also to increase the value of the company.


Key words: managerial overconfidence, corporate social responsibility, financial performance