Investigating the effect of managers' overconfidence on financial behavior in financial crisis conditions: Evidence from banks admitted to the Tehran Stock Exchange.

Ghadrdan, Ehsan; Lalehmazhin, Maryam; Eftekhari, Zahra

doi:10.48301/kssa.2023.384710.2442

Investigating the effect of managers' overconfidence on financial behavior in financial crisis conditions: Evidence from banks admitted to the Tehran Stock Exchange.

Document Type : Original Article

Authors

Ehsan Ghadrdan ¹

maryam lalehmazhin ²

Zahra Eftekhari ³

¹ Instructor of Accounting, Technical and Vocational University(TVU), Tehran, Iran

² Faculty Member,Department of Accounting, Technical and Vocational University(TVU), Tehran, Iran

³ M. Sc, Department of Accounting, Islamic Azad University Electronic Branch, Tehran, Iran

10.48301/kssa.2023.384710.2442

Abstract

One of the most important decisions facing business unit managers is financing decisions. Financing is one of the essential components of the operation of any business unit. Adoption of financing policies by managers plays a significant role in risk and wealth creation for shareholders. However, recognizing the factors influencing managers' financing decisions is more important. The purpose of this study is to investigate the effect of managers' overconfidence on financial behaviors of banks listed on the Tehran Stock Exchange during the financial crisis. In order to achieve this goal, three hypotheses were formulated. To test the hypotheses using the systematic elimination method; A sample consisting of 16 banks accepted in the Iranian banking industry during 2017-2021 was selected and a multivariate regression model based on composite and logistic data was used and also Ives 10 software was used for statistical analysis. The results of the study show that banks that are overconfident have more facilities than banks that do not have this feature. In times of crisis, banks that trust too much do not have more growth in financial debt than banks that do not trust much. During the critical years, banks that trust too much are more likely to go bankrupt than banks that do not trust too much.

Keywords

Overconfidence of managers

Banks'؛ financial behavior

Financial crisis

Subjects