Does managerial myopia promote enterprises over-financialization? Evidence from listed firms in China

This paper analyzes the potential shortsightedness of enterprise managers through annual reports. Additionally, we use corporate financial statement data to measure enterprises over-financialization in terms of resource allocation. After testing with a causal inference model, we find that firms with managerial myopia significantly contribute to over-financialization. It remains robust even after the instrumental variable of whether the manager has experienced a famine is used. Furthermore, financial distress and financing constraints amplify the inclination of short-term-focused managers to amass greater financial assets.

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Publication Details

Journal
PLoS ONE
Published
2024-09-05
DOI
https://doi.org/10.1371/journal.pone.0309140
Citations
4
Primary Topic
Housing, Finance, and Neoliberalism
Type
article
Field-Weighted Citation Impact
2.16

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article

Does managerial myopia promote enterprises over-financialization? Evidence from listed firms in China

Yanchi Chen, Qi Shi, Ye Ju
4 citations
PLoS ONE
Housing, Finance, and Neoliberalism
2.16
article

Does managerial myopia promote enterprises over-financialization? Evidence from listed firms in China

Yanchi Chen, Qi Shi, Ye Ju
article en
4 citations

Abstract

This paper analyzes the potential shortsightedness of enterprise managers through annual reports. Additionally, we use corporate financial statement data to measure enterprises over-financialization in terms of resource allocation. After testing with a causal inference model, we find that firms with managerial myopia significantly contribute to over-financialization. It remains robust even after the instrumental variable of whether the manager has experienced a famine is used. Furthermore, financial distress and financing constraints amplify the inclination of short-term-focused managers to amass greater financial assets.

PLoS ONEVol. 19(9)
Nanjing University of Finance and Economics (CN)
Nanjing University, Nanjing University of Finance and Economics, National Office for Philosophy and Social Sciences, National Social Science Fund of China
Decent work and economic growth
Openalex Percentile: Top 12%
Housing, Finance, and Neoliberalism
2.16
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