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:: Volume 9, Issue 18 (3-2025) ::
aapc 2025, 9(18): 465-503 Back to browse issues page
Investigating the impact of managers' myopia and overconfidence on the speed of achieving optimal working capital
Seyed Mojtaba Hosseini1 , Parvaneh Motie2 , Hamed Kargar3
1- Assistant Professor, Department of Accounting, Payame Noor University, Tehran, Iran(Corresponding Author) , smojhoseini@pnu.ac.ir
2- Assistant Professor, Department of Accounting, Payame Noor University, Tehran, Iran, PMotie@pnu.ac.ir
3- Department of Accounting, Payame Noor University, Tehran, Iran. hamedkargar37@gmail.com
Abstract:   (126 Views)

Working capital is important for companies because it represents their ability to pay short-term debts and withstand financial shocks, which can gain the trust of investors and creditors. Proper working capital management allows companies to invest in new investment opportunities and be flexible in entering new markets. It is of great importance to the optimal working capital. The purpose of this study is to Investigating the impact of managers' myopia and overconfidence on the speed of achieving optimal working capital. The presented research is of an applied type and a causal and post-event correlation­. In order to answer the research hypotheses, ­a sample of 124 companies listed in the Tehran Stock Exchange during the years 2011-2023 was selected using the systematic elimination model.  In order to measure managers' behavioral biases, two factors of myopia and overconfidence of managers have been used. The results of testing the research hypotheses ­show that managers' myopia increases the speed of adjustment of working capital­. However, managers' overconfidence slows down the rate of adjustment of working capital­. Therefore,­managers' behavioral biases affect ­companies' achievement of optimal working capital. myopia managers do ­not consider long-term investments desirable for the company and consider short-term returns. On the other hand, overconfident managers, having false confidence in ­­ their abilities­ by making ­unnecessary­ investment s­and involving the company's financial resources and capital in projects with a low probability of return on investment and accepting proposals with a low rate of profitability,­can slow down the rate of adjustment of working capital Are. The results of the present study can promote theoretical discussions on the effects of behavioral sciences on accounting sciences and fill the research gap in this field, and help managers and owners about the factors affecting the achievement of optimal working capital and a shorter operating cycle.
 
Keywords: Working Capital Adjustment Rate, Managers' Myopia‌, Managers' Overconfidence, Liquidity Conversion Cycle.
Full-Text [PDF 709 kb]   (98 Downloads)    
Type of Study: Research | Subject: Special
Received: 2025/03/15 | Accepted: 2025/06/21 | Published: 2025/03/19
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Hosseini S M, Motie P, Kargar H. Investigating the impact of managers' myopia and overconfidence on the speed of achieving optimal working capital. aapc 2025; 9 (18) :465-503
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Volume 9, Issue 18 (3-2025) Back to browse issues page
دوفصلنامه علمی حسابداری ارزشی و رفتاری journal of Value & Behavioral Accounting
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