The Interactive Effect of Managerial Overconfidence and Institutional Shareholders' Attention Diversion on Corporate Social Responsibility in the Tehran Stock Exchange.

Lalehmazhin, Maryam; Vaez, Seyed Ali; Ramazan Ahmadi, Mohammad; Farazmand, Hassan

doi:10.48301/kssa.2025.538330.3271

The Interactive Effect of Managerial Overconfidence and Institutional Shareholders' Attention Diversion on Corporate Social Responsibility in the Tehran Stock Exchange.

Document Type : Original Article

Authors

Maryam Lalehmazhin ¹

Seyed Ali Vaez ²

Mohammad Ramazan Ahmadi ³

Hassan Farazmand ⁴

¹ Ph.D.Student, Department of Accounting, Shahid Chamran University of Ahvaz, Ahvaz, Iran.

² Associate Professor, Department of Accounting, Shahid Chamran University of Ahvaz, Ahvaz, Iran.

³ Associate Professor, Department of Accounting, Shahid Chamran University of Ahvaz, Ahvaz, Iran

⁴ Professor of Economics, Department of Accounting, Shahid Chamran University of Ahvaz, Ahvaz, Iran.

10.48301/kssa.2025.538330.3271

Abstract

Abstract

Abstract:

Corporate Social Responsibility (CSR), as a commitment to maintaining legitimacy and long-term sustainability, is influenced by managerial behavior and shareholder oversight. Behavioral traits of managers and weak monitoring mechanisms can hinder the fulfillment of these responsibilities. This study examines the interactive effect of managerial overconfidence and institutional investors’ attention deviation on CSR and its legal, economic, and ethical dimensions in Iranian listed companies. The statistical population includes 132 firms listed on the Tehran Stock Exchange during the years 2014–2023, analyzed using panel regression models with fixed effects. The findings indicate that managerial overconfidence has a positive and significant effect on overall CSR as well as its economic and ethical dimensions, but not on the legal dimension. Institutional investors’ attention deviation has a negative and significant effect across all dimensions. The interaction effect of these two variables is positive for overall CSR and the economic dimension, negative for the ethical dimension (due to weakened institutional monitoring), and insignificant for the legal dimension. These results are consistent with agency and legitimacy theories. The study provides new insights for policymaking and strengthening institutional monitoring.

Keywords

Keywords: Corporate Social Responsibility, Managerial Overconfidence, Institutional Shareholders'

Attention Diversion, Corporate Governance,

Subjects