Relationships between Managerial Overconfidence, Internal Financing and Investment Efficiency

Objective: The purpose of this study is to examine the relationships between management overconfidence, internal financing, and investment efficiency in the companies listed in the Tehran Stock Exchange. Method: A sample of 130 companies was selected in the period 2007-2017. To measure investment ef...

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Autores principales:	Vahid Taghizadeh Khanqah, Younes Badavar Nahandi
Formato:	article
Lenguaje:	FA
Publicado:	Shahid Bahonar University of Kerman 2020
Materias:	management overconfidence internal financing over- investment under-investment Accounting. Bookkeeping HF5601-5689
Acceso en línea:	https://doaj.org/article/7cbd52a380104ea1942a709a102650d8
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spelling	oai:doaj.org-article:7cbd52a380104ea1942a709a102650d82021-11-04T19:56:10ZRelationships between Managerial Overconfidence, Internal Financing and Investment Efficiency2008-89142476-292X10.22103/jak.2020.13748.2944https://doaj.org/article/7cbd52a380104ea1942a709a102650d82020-07-01T00:00:00Zhttps://jak.uk.ac.ir/article_2518_d1afc673159b8588838621677f1a6b80.pdfhttps://doaj.org/toc/2008-8914https://doaj.org/toc/2476-292XObjective: The purpose of this study is to examine the relationships between management overconfidence, internal financing, and investment efficiency in the companies listed in the Tehran Stock Exchange. Method: A sample of 130 companies was selected in the period 2007-2017. To measure investment efficiency, the indicators of over- and under-investment were rated. Also, to measure management overconfidence and internal financing, capital expenditures and retained earnings were assessed, respectively. Results: The findings showed that there is a positive relationship between management overconfidence and internal financing. Also, there are positive relationships between management overconfidence and investment level, and between management overconfidence and over-investment, and there is a negative relationship between the management overconfidence and under-investment. On the other hand, the results showed that there are positive relationships between internal financing and the investment level, and between internal financing and over-investment, and that there is a negative relationship between internal financing and under-investment. The results indicate that 1) internal financing has positive effects on the relationship between managerial overconfidence and the level of investment, 2) the interactive effect of internal financing on the relationship between the managerial overconfidence and over-investment is significant and positive, while the similar effect concerning under-investment is not significant. Conclusion: Existence of internal resources increases the motivation of overconfidence managers in using personal gain resources and leads to non-optimal investment behaviors. This process is done by increasing the levels of investment.Vahid Taghizadeh KhanqahYounes Badavar NahandiShahid Bahonar University of Kermanarticlemanagement overconfidenceinternal financingover- investmentunder-investmentAccounting. BookkeepingHF5601-5689FAمجله دانش حسابداری, Vol 11, Iss 2, Pp 209-238 (2020)
institution	DOAJ
collection	DOAJ
language	FA
topic	management overconfidence internal financing over- investment under-investment Accounting. Bookkeeping HF5601-5689
spellingShingle	management overconfidence internal financing over- investment under-investment Accounting. Bookkeeping HF5601-5689 Vahid Taghizadeh Khanqah Younes Badavar Nahandi Relationships between Managerial Overconfidence, Internal Financing and Investment Efficiency
description	Objective: The purpose of this study is to examine the relationships between management overconfidence, internal financing, and investment efficiency in the companies listed in the Tehran Stock Exchange. Method: A sample of 130 companies was selected in the period 2007-2017. To measure investment efficiency, the indicators of over- and under-investment were rated. Also, to measure management overconfidence and internal financing, capital expenditures and retained earnings were assessed, respectively. Results: The findings showed that there is a positive relationship between management overconfidence and internal financing. Also, there are positive relationships between management overconfidence and investment level, and between management overconfidence and over-investment, and there is a negative relationship between the management overconfidence and under-investment. On the other hand, the results showed that there are positive relationships between internal financing and the investment level, and between internal financing and over-investment, and that there is a negative relationship between internal financing and under-investment. The results indicate that 1) internal financing has positive effects on the relationship between managerial overconfidence and the level of investment, 2) the interactive effect of internal financing on the relationship between the managerial overconfidence and over-investment is significant and positive, while the similar effect concerning under-investment is not significant. Conclusion: Existence of internal resources increases the motivation of overconfidence managers in using personal gain resources and leads to non-optimal investment behaviors. This process is done by increasing the levels of investment.
format	article
author	Vahid Taghizadeh Khanqah Younes Badavar Nahandi
author_facet	Vahid Taghizadeh Khanqah Younes Badavar Nahandi
author_sort	Vahid Taghizadeh Khanqah
title	Relationships between Managerial Overconfidence, Internal Financing and Investment Efficiency
title_short	Relationships between Managerial Overconfidence, Internal Financing and Investment Efficiency
title_full	Relationships between Managerial Overconfidence, Internal Financing and Investment Efficiency
title_fullStr	Relationships between Managerial Overconfidence, Internal Financing and Investment Efficiency
title_full_unstemmed	Relationships between Managerial Overconfidence, Internal Financing and Investment Efficiency
title_sort	relationships between managerial overconfidence, internal financing and investment efficiency
publisher	Shahid Bahonar University of Kerman
publishDate	2020
url	https://doaj.org/article/7cbd52a380104ea1942a709a102650d8
work_keys_str_mv	AT vahidtaghizadehkhanqah relationshipsbetweenmanagerialoverconfidenceinternalfinancingandinvestmentefficiency AT younesbadavarnahandi relationshipsbetweenmanagerialoverconfidenceinternalfinancingandinvestmentefficiency
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Relationships between Managerial Overconfidence, Internal Financing and Investment Efficiency

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