The effect of management behavioral strains on financial distress

The purpose of this study is to investigate the effect of management behavioral strains on financial distress at companies listed in Tehran Stock Exchange. Research sample consists of 150 distressed year-companies and 150 healthy years-companies for overconfidence, 165 distressed year-companies and 165 healthy years-companies for myopic,112 distressed year-company and 112 healthy years-companies for narcissism in the period of 2009 to 2017. To separate distressed and healthy companies, Asquith et al (1994) criteria is used and model is fitted using binary logistic regression. Research findings show that management behavioral strains including overconfidence and narcissism have a positive and significant effect on financial distress but myopic has not such an effect. So, Managers’ overconfidence and narcissism increase the likelihood of financial distress