Overconfidence managers and the presence of leverage risk

In the presence of risky debt, manager’s incentives change from refusing to accept projects with more risk (risk-shifting) and rejecting less (risk-avoidance). Managers all level confidence produce different biases behavior about uncertainty. The paper aims analyze influence debt asset ratio (DAR) managers’ overconfidence on business risk. After extremely censored data 10 percent above, type pooled collected is 3016 observation units companies listed Indonesia Stock Exchange (IDX) period 2008–2019. Dummy regression was used for analysis DAR, manager (high, upper middle, lower, low overconfidence) explanatory variable, dependent variable. does not always risk-shifting, but in reverse form avoidance (underinvestment projects). fear losing their jobs earning a bad reputation, results have distorted all-level role