Psychological biases and the capital structure decisions: a literature review
Each decision-making process is an important cognitive and emotional process which is open to the emotional effect. Individuals decide to make a decision about a future uncertainty that makes them feel good, or maximally good by minimizing the loss to gain ratio. Recent researches in finance have ar...
| Main Author: | |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
General Association of Economists from Romania
2014-12-01
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| Series: | Theoretical and Applied Economics |
| Subjects: | |
| Online Access: |
http://store.ectap.ro/articole/1049.pdf
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| _version_ | 1817994329969393664 |
|---|---|
| author | Tekin BILGEHAN |
| author_facet | Tekin BILGEHAN |
| author_sort | Tekin BILGEHAN |
| collection | DOAJ |
| description | Each decision-making process is an important cognitive and emotional
process which is open to the emotional effect. Individuals decide to make a
decision about a future uncertainty that makes them feel good, or maximally good
by minimizing the loss to gain ratio. Recent researches in finance have argued that
the capital structure decisions and firms’ funding and strategic choices deviate
from the traditional neoclassical paradigm. However there is a nascent empirical
literature that has exposed interesting evidence of the effects of managerial
behavioral biases. In this context, managers’ decisions, that to create the capital
structure, have a vital importance for the company. The behavioral finance (BF)
approach may be revealed useful results in the process of solving decision-makers’
behaviors and thoughts. In this context the purpose of this study is to reveal if the
managers are affected by their behavioral characteristics in the process of the
financing decision-making, based on the findings of studies in the literature. From
this point of view behavioral finance literature, which is about the financing and
capital structure decisions, is investigated. As a result, theoretical and empirical
analyses, in the literature, show that managers’ biases play an important role to
explain the capital structure choice. |
| first_indexed | 2024-04-14T01:51:26Z |
| format | Article |
| id | doaj.art-397faf4148514bc78dba18c47bd9e30e |
| institution | Directory Open Access Journal |
| issn | 1841-8678 1844-0029 |
| language | English |
| last_indexed | 2024-04-14T01:51:26Z |
| publishDate | 2014-12-01 |
| publisher | General Association of Economists from Romania |
| record_format | Article |
| series | Theoretical and Applied Economics |
| spelling | doaj.art-397faf4148514bc78dba18c47bd9e30e2022-12-22T02:19:20ZengGeneral Association of Economists from RomaniaTheoretical and Applied Economics1841-86781844-00292014-12-01XXI1212314218418678Psychological biases and the capital structure decisions: a literature reviewTekin BILGEHAN0 Cankiri Karatekin University, Turkey Each decision-making process is an important cognitive and emotional process which is open to the emotional effect. Individuals decide to make a decision about a future uncertainty that makes them feel good, or maximally good by minimizing the loss to gain ratio. Recent researches in finance have argued that the capital structure decisions and firms’ funding and strategic choices deviate from the traditional neoclassical paradigm. However there is a nascent empirical literature that has exposed interesting evidence of the effects of managerial behavioral biases. In this context, managers’ decisions, that to create the capital structure, have a vital importance for the company. The behavioral finance (BF) approach may be revealed useful results in the process of solving decision-makers’ behaviors and thoughts. In this context the purpose of this study is to reveal if the managers are affected by their behavioral characteristics in the process of the financing decision-making, based on the findings of studies in the literature. From this point of view behavioral finance literature, which is about the financing and capital structure decisions, is investigated. As a result, theoretical and empirical analyses, in the literature, show that managers’ biases play an important role to explain the capital structure choice. http://store.ectap.ro/articole/1049.pdf Capital Structure DecisionsBehavioral BiasesDecision Making |
| spellingShingle | Tekin BILGEHAN Psychological biases and the capital structure decisions: a literature review Theoretical and Applied Economics Capital Structure Decisions Behavioral Biases Decision Making |
| title | Psychological biases and the capital structure decisions: a literature review |
| title_full | Psychological biases and the capital structure decisions: a literature review |
| title_fullStr | Psychological biases and the capital structure decisions: a literature review |
| title_full_unstemmed | Psychological biases and the capital structure decisions: a literature review |
| title_short | Psychological biases and the capital structure decisions: a literature review |
| title_sort | psychological biases and the capital structure decisions a literature review |
| topic | Capital Structure Decisions Behavioral Biases Decision Making |
| url |
http://store.ectap.ro/articole/1049.pdf
|
| work_keys_str_mv | AT tekinbilgehan psychologicalbiasesandthecapitalstructuredecisionsaliteraturereview |