Impact of Managers’ Optimism on the Relationship between Patience of Major Shareholders and Information Influence Management

Advances in Mathematical Finance and Applications

مقاله 3، دوره 4، شماره 3، مهر 2019، صفحه 31-48   

نوع مقاله: Research Paper

شناسه دیجیتال (DOI): 10.22034/amfa.2019.585705.1188

نویسندگان

Hossein Rostami¹؛ Farzin Rezaei^{* 1}؛ Abdolsamad Khalatbari²

¹Department of Accounting, Qazvin Branch, Islamic Azad University, Qazvin, Iran

²Department of Accounting, Ramsar Branch, Islamic Azad University, Ramsar, Iran

چکیده

Behavioral financial knowledge deals with the behavior of investors and other users in the capital market. According to the financial knowledge, it is no longer expected that only factors such as accounting information and macroeconomic variables will affect decision-making but also a variety of behavioral variables including manager’s optimism, information influence management, patience of major shareholders and other investors' biases can have an impact on the prices and stock returns. The purpose of this study was to investigate the impact of managers' optimism on the relationship between the patience of major shareholder and information influence management. This study attempts to investigate the relationship between these behaviors and information influence management by measuring the degree of major shareholders patience and managers’ optimism. This is a descriptive post-event research. The study population consisted of the companies listed on Tehran Stock Exchange (n = 87) between the years 2008 and 2017. Multivariate regression was used to test the hypotheses. The findings showed no significant relationship between the major shareholders patience and the information influence management (high, low, balanced). Further, it was found that managers’ optimism has a significant effect on the relationship between the major shareholders' patience and the information influence management (balanced level) and no significant relationship was observed between two other levels.

کلیدواژه‌ها

Managers 'optimism؛ major shareholders' patience؛ information influence management

مراجع

[1] Abzari, M., Derakhshideh, H., Impact of improving financial information on investors' attitudes in Stock Exchange of Isfahan. Quarterly Journal of Planning and Budgeting. Eighteenth .2015, 1, P. 59-75, (in Persian).

[2] Aliqoli, M., Jalilian, A., Investigating the relationship between long-term / temporary institutional investors and management. Journal of Management Accounting Knowledge Management, 2017, 4, (in Persian).

[3] Andrew,C, C., Shuping ,C., Adam,E and Bin ,M., Does Long-Term Earnings Guidance Mitigate Managerial Myopia?, 2018, Doi: 10.1007/s11142-013-9270-7.

[4] Anvari Rostami, A, A., Mohammad Abadie, M., Investigating the impact of opportunistic strategies on predictability of financial reporting. Tenth National Accounting Conference in Iran, Alzahra University, 2013.  P.319-335, (in Persian).

[5] Ben Mohamed, E., Fairchild, R. and Bouri, A. Investment cash flow sensitivity under managerial optimism: New evidence from NYSE panel data firms, Journal of Economics, Finance and Administrative Science, 2017, 28, P.11–18, Doi: 10.2139/ssrn.2288702.

[6] Bouwman, C. H. S. Managerial optimism and earnings smoothing. Journal of Banking & Finance, 2014, 41,P. 283–303, Doi: 10.1016/j.jbankfin.2013.12.019

[7] Brundin, E. & Veronika, G. Entrepreneur’s decision making under different levels of uncertainty: The role of emotions. International Journal of Entrepreneurial Behaviour & Research, 2013, 19(6), P.568-591, Doi: 10.1108/IJEBR-07-2012-0074.

[8] Capps, G., L. Koonce, and K. Petroni, Natural Optimism in Financial Reporting: A State of Mind. Accounting Horizons, 2016, 30 (1).P.76-91, Doi:10.2308/acch-51277.

[9] Darabi, R; Zarei A. The effect of management's overwhelming risk of falling stock prices with an emphasis on the moderating role of accounting conservatism. Journal of Financial Accounting Knowledge, 2017, 4(1), 12, (in Persian).

[10] Ghaemi, M ,H, Eskandrari, T. Investigating the behavior of corporate executives in predicting annual profit. Quarterly of Empirical Financial Accounting Studies, 2014, 11(40), P. 53-75, (in Persian).

[11] Ghayour Baghie, S M., Behboudie, O. Factors affecting investor behavior using phenomenological approach. Journal of Management of Finance and Funds. 2013, 3(18), P. 57-67, (in Persian).

[12] GHolami, R., & Lalbar, A. Studying the Relationship between the Financial Incentives of Board Members and Disclosure of Corporate Risk, Emphasizing the Levels of Corporate Performance and Risk, Advances in Mathematical Finance & Applications, 2018, 3(1), 2018, P. 69-78. Doi: 10.22034/amfa.2018.539135, (in Persian).

[13] Gordon,L., Loeb, M.,and Tesng,C. Enterprise Risk Mangement and firm performance: Acontingency perspective, journal of Accounting and public policy, 2009, 28(4), P.301-327,  Doi:10.1016/j.jaccpubpol.2009.06.006.

[14] Graham, J. R., Harvey, C. R., & Puri, M. Managerial attitudes and corporate actions. Journal of Financial Economics, 2013, 109 (1),P. 103-121, Doi: 10.1016/j.jfineco.2013.01.010.

[15] Huang, W., F. Jiang, Z. Liu, and M. Zhang. Agency cost, top executives' overconfidence, and investment-cash flow sensitivity Evidence from listed companies in China. Pacific-Basin Finance Journal, 2011, 19(3),P. 261-277, Doi:pacfin:v:19:y:2011:i:3:p:261-277.

[16] Hutton, A. P., A. J. Marcus, and H. Tehranian. Opaque Financial Reports, R2, and Crash Risk. Journal of Financial Economics, 2009, 94(1),P. 67-86, Doi: 10.1016/j.jfineco.2008.10.003.

[17] Jaafar, H., Halim, H. A., Ismail, R., & Ahmad, A. S. Fraudulent Financial Reporting and Impression Management: An Examination of Corporate Accounting Narratives. International Journal of Academic Research in Business and Social Sciences, 2018, 8(10),P. 824–837.

[18] Khabazkar Foomani, M., & Sarlak, A. Investigating the relationship among information asymmetry, dividend policy and ownership structure, Advances in Mathematical Finance & Applications, 2018, 3(2), P. 69-80, Doi: 10.22034/amfa.2018.540832. (in Persian).

[19] Khajavie, Sh., Dehghani Sa'adi, A,A., Gerami Shirazi, F., The effect of managers' narcissism on earnings management and financial performance. Journal of Accounting Progress of Shiraz University, 2017, 8(2), P. 123-149, (in Persian).

[20] Khoddamipour, A., Bagheri Masoudzadeh, R., Managing user impressions through disclosure in annual reports. Journal of Scientific Accounting, Accounting Knowledge, 2018, 1 (8), P. 51-74, (in Persian).

[21] Kiymaz, H., The impact of announced motives, financial distress, and industry affiliation on shareholders’ wealth: evidenve from large sell-offs. Business and economics, 2006,P. 69-89 .

[22] Leung, S., Parker, Lee.,Courtis, J., Impression management through minimal narrative disclosure in annual reports. The British Accounting Review, 2015, 47, P..275 – 289,  Doi:10.1177/232948841771 2010

[23] Li, J., Tong ,W., Managerial Overconfidence, CEO Selection and Corporate Investment: An Empirical Analysis. Working paper, 2012,  Doi: 10.1111/j.1540-6261.2008.01412

[24] Lindenberg, E. B., & Ross, S. A., Tobin's Q ratio and industrial organization. Journal of Business, 1981, 54 (1),P.1−32, Doi:10.1086/296120.

[25] Mehregan, M, R ., Delshad, A., Investigating the effect of changing the attitude of overconfident management to rational management on stock returns. Journal of Financial Accounting, 2018, 4(2), P.1-26, (in Persian).

[26] Moradi, M, Prandeh, E, Marandi, Z., Investigating the relationship between the stockholders’ investment horizon and information content of unexpected dividends. Magazine of Financial Engineering & Securities Management, 2018, 33, (in Persian).

[27] Presley, T. J., and Abbott, L. J., AIA submission: CEO overconfidence and the incidence of financial restatement. Advances in Accounting, 2013, 29(1),P.74-84, Doi: 10.1016/j.adiac.2013.03.007

[28] Ramsheh, M., Mollanzeri, M., Overconfident management and accounting conservatism. Accounting Knowledge, 2015, 15 (16), P.55-79, (in Persian).

[29] Rezaei, F., Mohammadpour , S., The relationship between information influence management through disclosure of information and the performance of companies. Graduates of, Takestan Higher Education Institut, 2018, (in Persian).

[30] Sakunasingha, B. An empirical study into factors influencing the use of value-based management tools, 2006.

[31] Schrand, C., Zechman, S., Executive Overconfidence and Slippery Slope to Financial Misreporting; Journal of Accounting and economics, 2012, 53(1-2),P. 311-329, Doi 10.1016/j.jacceco.2011.09.001.

[32] Schroeder, R., Clarke, M., Jack ,K., Analysis of Financial Accounting Theory, Translated by Ali Parsayian, Tehran: Termeh  Press, 2012, ISBN: 9781118582794.

[33] Setayesh, M, H., Shamseddini, K., Investigating the relationship between emotional attitudes of investors and Stock Prices of Companies Accepted in Tehran Stock Exchange. Accounting Advancements, 2017, 8 (1), P. 103-125, (in Persian).

[34] Shamseddini, K; Daneshie; V; Seyyedi; F. Investigating the impact of investors' behavior and stock equity management. Journal of Accounting Knowledge, 2019, 9(2). P. 163-18, (in Persian).

[35] Smales L, A. News sentiment and the investor fear gauge. Finance Research Letters, 2014, 11(2),P.122-130, Doi: 10.1080/00036846.2016.1259754.

[36] Sobhanie, M, Rezaei, F and Kurdestanie, G. Determining the optimal limit of accounting information quality for patient and inpatient shareholders using ultra-innovative algorithms, 2019, Ph.D. thesis, Islamic Azad University, Qazvin Branch. (in Persian).

[37] Soleimani Amiri, G; Godarzi, N. Behavioral basics of dividend policy. Quarterly Journal of Empirical Financial Accounting Studies, 2019, 11(39), P. 83-104, (in Persian).

[38] Tavasoli, A., Saeidi, P., & Biglari, B. According to Agency Theory and Neoclassical Theory; New Ownership and Diversity of Public Sector Companies in Corporate Life Cycle, Advances in Mathematical Finance & Applications, 2018,  3(1), P. 1-16, Doi: 10.22034/amfa.2018.539131. (in Persian).

[39] Wang, J. Literature Review on the Impression Management in Corporate Information Disclosure. Modern Economy, 2016, 7,P. 725-731.