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Irrational managers and firm performance - a mediating role of financing decisions.

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dc.contributor.author Thowfeek Ahamed, Samsudeen
dc.contributor.author Haleem, Athambawa
dc.contributor.author Sithy Safeena, M. G. H
dc.date.accessioned 2021-03-31T10:32:48Z
dc.date.available 2021-03-31T10:32:48Z
dc.date.issued 2020-06
dc.identifier.citation Journal of Business Economics, 02(02), 2020: pp.13-24. en_US
dc.identifier.issn 2682 - 6933
dc.identifier.uri http://ir.lib.seu.ac.lk/handle/123456789/5421
dc.description.abstract Behavioral finance traditionally discusses the irrational investor biases to stock purchase decisions and ignored the strategic role and their psychological biases of senior managers. However, recent literature has provided much attention to the Top Management Team’s (TMT) Psychological biases on investment, financing, and dividend decisions. Hence, two important approaches are being studied in line with behavioral finance. The first approach is related to irrational investor bias with rational managers and the second approach is irrational managers with rational investors. This article completely investigates the irrational managers and their corporate decisions, which encompasses CFOs’ optimism, overconfidence, and risk-aversion on future firm performance through the mediating effect of financing decisions. The article also reviews prior research and extensive evidence about how psychological biases of CFOs affect various corporate decisions such as investment, financing, acquisitions, the stock option which in-turn affect firm performance. This is a systemic review of literature on behavioral corporate finance where a research gap was found that the majority of the past studies documented CEOs/CFOs' behavioral biases influence either investment decision or financing decision, subsequently not measured firm performance in their model. Therefore, this review paper provides a conceptual model of CFOs' behavioral biases influence firm performance with the mediating effect of financing decisions. This could be the first survey method that analyses the behavioral biases of CFOs in the Sri Lankan context and bring novel contribution to the existing behavioral corporate finance literature. This review paper also shed light on the direction for future research and recommendation for further studies. en_US
dc.language.iso en_US en_US
dc.publisher Faculty of Management & Commerce, South Eastern University of Sri Lanka, Oluvil. en_US
dc.subject Behavioural Corporate Finance en_US
dc.subject Behavioural Bias en_US
dc.subject Irrational Managers en_US
dc.subject Optimism en_US
dc.subject Overconfidence en_US
dc.subject Risk-Aversion en_US
dc.title Irrational managers and firm performance - a mediating role of financing decisions. en_US
dc.type Article en_US


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