We propose that while positive performance feedback is positively related to firm sentiment, negative performance feedback is negatively associated with the firm sentiment. Additionally, overconfident Chief Executive Officers (CEOs) will improve the positive relationship between positive performance feedback and firm sentiment and reduce the negative relationship between negative performance feedback and firm sentiment. Using 7,182 firm-year observations for the 2004−2017 period, we show that positive performance feedback positively affects firm sentiment, and negative performance feedback negatively influences firm sentiment. We also found that higher levels of CEO overconfidence will minimize the negative impact of negative performance feedback on firm sentiment. Our research extends the current discourse on organizational impression management (proxied by firm sentiment) and CEO overconfidence research as we provide a nuanced relationship between firm performance feedback and organizational impression management. Our findings have theoretical and practical implications for corporate governance leaders and shareholders.

We provide a meta-analytic examination of the CEO overconfidence–firm performance relationship. Our results support a positive relationship between these focal variables. Drawing from trait activation theory and national cultural differences literatures, we find that cross-cultural effects moderate the focal relationship. More specifically, we find that the CEO overconfidence–firm performance relationship is stronger in high assertive, low institutional collectivistic, low in-group collectivistic, high future-oriented, high gender egalitarian, high performance-oriented, low power distance, and low uncertainty avoidance cultures. Consistent with the resource orchestration literature, we also find that entrepreneurial orientation mediates the focal relationship between CEO overconfidence and firm performance. Taken together, our results present a more nuanced picture of the CEO trait–firm performance relationship. In the future, researchers may consider examining additional CEO traits as well as additional contextual factors including internal, as well as environmental, factors.