Work

Does managerial myopia promote enterprises over-financialization? Evidence from listed firms in China

Year: 2024

Type: article

Abstract: This paper analyzes the potential shortsightedness of enterprise managers through annual reports. Additionally, we use corporate financial statement data to measure enterprises over-financialization in terms of resource allocation. After testing with a causal inference model, we find that firms with managerial myopia significantly contribute to over-financialization. It remains robust even after the instrumental variable of whether the manager has experienced a famine is used. Furthermore, financial distress and financing constraints amplify the inclination of short-term-focused managers to amass greater financial assets.

Source: PLoS ONE

DOI: 10.1371/journal.pone.0309140

Authors: Yanchi Chen, Ju Ye, Qi Shi

Institution: Nanjing University of Finance and Economics

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: gold

Estimated APC paid: $2,290

Funders: Nanjing University, Nanjing University of Finance and Economics, National Office for Philosophy and Social Sciences, National Social Science Fund of China