Executive confidence and firm performance: pandemic impacts, quantile effects, and organizational dynamics

This study examines the relationship between executive confidence and firm performance and explores how organizational context influences the effectiveness of leadership. Using a large panel of listed firms in an emerging market over a five-year period, the analysis employs fixed-effects and quantile regressions to address distributional heterogeneity. Executive confidence demonstrates a consistently positive impact on both market- and accounting-based performance metrics, and the results are robust to industry fixed-effects and a placebo test. However, this positive effect weakens in highly profitable firms and during periods of heightened uncertainty, such as the COVID-19 pandemic. Subsample and moderation analyses show a stronger relationship in firms with male-dominated boards, indicating that organizational context shapes the impact of executive confidence. This study extends the upper echelons theory by illustrating how compensation-based structural proxies can capture confidence-driven behavior in environments with limited behavioral data. While these findings offer practical guidance for board governance and executive development, they also highlight the necessity for safeguards to mitigate overconfidence.