The Effect of Managerial Overconfidence on Debt Maturity Structure in Listed Companies in Tehran Stock Exchange
Author(s):
Article Type:
Research/Original Article (دارای رتبه معتبر)
Abstract:
Financing policies made by managers can play a key role in the risk and wealth creation for stochkholders. However, identifying effective factors in managers` financing decisions is of great importance. Overconfidence is one of the most important personality traits of managers. Overconfidence is effective in risk taking. Overconfident managers overestimate future returns of business projects due to false confidence. Therefore, they might overestimate the likelihood and impact of positive shocks of future cash flows for these projects. Meanwhile, they may underestimate the negative shocks. They believe that their business entities have been undervalued in the capital market and can choose shorter maturity debt and increase shareholder wealth. They prefer to issue bonds rather than stocks. This study aims to examine the effect of a psychological factor (managerial overconfidence) on debt maturity structure. The sample consisted of selected companies listed in Tehran Stock Exchange from 2007 to 2014. Two scales which are based on managers` bias to forecast earnings and investment decisions are employed to measure the managerial overconfidence. The results show that managerial overconfidence has a positive and significant effect on debt maturity structure. Overconfident managers take shorter debt maturity structure by applying higher percentage of short-term debt. Liquidity risk related to this financing policy would not prevent them from such behavior.
Keywords:
Language:
Persian
Published:
Asset Management and Financing, Volume:6 Issue: 1, 2018
Pages:
89 to 106
magiran.com/p1934186
دانلود و مطالعه متن این مقاله با یکی از روشهای زیر امکان پذیر است:
اشتراک شخصی
با عضویت و پرداخت آنلاین حق اشتراک یکساله به مبلغ 1,390,000ريال میتوانید 70 عنوان مطلب دانلود کنید!
اشتراک سازمانی
به کتابخانه دانشگاه یا محل کار خود پیشنهاد کنید تا اشتراک سازمانی این پایگاه را برای دسترسی نامحدود همه کاربران به متن مطالب تهیه نمایند!
توجه!
- حق عضویت دریافتی صرف حمایت از نشریات عضو و نگهداری، تکمیل و توسعه مگیران میشود.
- پرداخت حق اشتراک و دانلود مقالات اجازه بازنشر آن در سایر رسانههای چاپی و دیجیتال را به کاربر نمیدهد.
In order to view content subscription is required
Personal subscription
Subscribe magiran.com for 70 € euros via PayPal and download 70 articles during a year.
Organization subscription
Please contact us to subscribe your university or library for unlimited access!