Journal of Economics Finance and Administrative Science · 2014 · 27 citations · 38 references
BusinessBusiness EconomicsFinanceBehavioral FinanceCorporate FinanceFinancial EconomicsBehavioral Corporate FinanceCapital Structure DeterminantsCapital Structure TheoryCash Flow EstimationCognitive Biases In InvestingInvestor SentimentCorporate Financing BehaviorCorporate Investment PolicyInvestment Cash Flow AnalysisInvestment ModelInvestment Policy EffectsInvestment-cash Flow SensitivityManagerial OptimismOwnership Structure Effects
This study tries to extend previous works on behavioral corporate finance by examining the interaction between investment cash flow sensitivity and various CEO characteristics in either the existence or inexistence of managerial optimism. Using a Q-investment model and departing from a sample of 475 annual observations, our results highlight that CEO's financial education, CEO's ownership and their optimism bias can explain distortions in corporate investment policy since they affect investment cash flow's relationship.
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Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers
Michael C. Jensen · American Economic Review · 1986 · 17.6K citations
Management ownership and market valuation
Andrei Shleifer, Robert W. Vishny · Journal of Financial Economics · 1988 · 7.1K citations · Full text