Future research ideas

The core of corporate development remains long-term economic efficiency. Future research could investigate the economic consequences of internal control in moderating the

relationship between managerial overconfidence and corporate risk-taking. We could investigate whether the moderating effect of internal control increases the firm value (Tobin's Q) and improves the efficiency of its capital allocation in future study. Corporate risk-taking is, to some extent, a short-sighted behavior because excessive risk-taking would bring negative outcomes to long-term corporate development. I believe that a company's risk-taking is excessive if it has a negative impact on the economic performance of the company. The emergence of internal controls may save the company from an adverse situation where excessive risk-taking leads to a less efficient allocation of capital and a reduction in the firm value. So I hope that in future research it will be possible to combine internal control and the economic consequences it generates to investigate the value it provides to the relationship of managerial overconfidence and risk-taking behavior.

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