We examine the impact of CEO tenure on corporate labor investment efficiency. While some studies show that CEO entrenchment increases in tenure (e.g., Hermalin and Weibach, 1998), others argue that managerial expertise builds over time in the office (e.g., Graf-Vlachy et al., 2020). Using a...

This note deals with the simplified case of a principal (e.g., a firm's board of directors) which delegates execution of an economic activity to a business unit (or a subsidiary firm) managed by a manager. It is assumed that the manager has no control over the cash flows injected into the unit...

Purpose-The existence of optimism as a personal psychological characteristic of managers is a necessity in contemporary economy and decision making, although the phenomenon of over-optimism may lead to unfavourable outcomes. The purpose of this study is to examine the optimism bias and its...

Using hand-collected data on divisional managers at conglomerates, we find that a change in industry surplus in one division generates large spillovers on managerial payoffs in other divisions of the same firm. These spillovers arise only within the boundaries of a conglomerate but not between...

Purpose: The purpose of this paper is to examine the impact of managerial optimism on corporate investment regarding the financially constrained firms for the case of Greece. Taking as a fact that managers principally are optimistic and often overconfident an effort is made to highlight the...

Investment cash flow sensitivity constitutes one important block of the corporate financial literature. While it is well documented in standard corporate finance, it is still young under behavioral corporate finance. In this paper, we test the investment cash flow sensitivity among panel data of...

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...

We examine the impact of managerial optimism on the inclusion of performance-pricing provisions in syndicated loan contracts (PSD). Optimistic managers may view PSD as a relatively cheap form of financing given their upwardly biased expectations about the firm's future cash flow. Indeed, we find...

The aim of this paper is to explore the determinants of firms’ financial policies according to the manager's psychological characteristics. More specifically, it examines the links between emotional intelligence, decision biases and the effectiveness of firms' financial policies. The article...