The Financial Lobster Bias

The Financial Lobster Bias describes how SMEs, driven by distorted liquidity perceptions, engage in aggressive expansion until financial breakdown occurs. Using data from 10,412 Spanish SMEs (2000–2024), this study shows that liquidity misperception—measured through two versions of the Liquidity Misperception Index (PEL), one based on financial structure and another on payment–collection timing (PMP–PMC)—is a significant driver of expansion–collapse cycles. The financial PEL displays a strong temporal trend (R2 = 0.736), while the PMP–PMC-based PEL also increases over time (R2 = 0.411), evidencing a persistent widening between perceived and real liquidity. The Illusory Confidence in Liquidity Index (ICEL) reveals that confidence peaks coincide with periods of systemic fragility. The Unsustainable Expansion Index (IEI) identifies pre-crisis overexpansion (IEI = 2.34 in 2005; 2.87 in 2006; 1.72 in 2007), preceding the 2008 failure surge. Together, these indicators provide early-warning mechanisms that uncover hidden fragility and help anticipate liquidity-driven collapse.

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Publication Details

Journal
International Journal of Financial Studies
Published
2026-01-07
DOI
https://doi.org/10.3390/ijfs14010017
Primary Topic
Working Capital and Financial Performance
Type
article
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article

The Financial Lobster Bias

José Torres-Pruñonosa, Iría Paz Gil, Raúl Gómez-Martínez, Óscar De los Reyes Marín
International Journal of Financial Studies
Working Capital and Financial Performance
article

The Financial Lobster Bias

José Torres-Pruñonosa, Iría Paz Gil, Raúl Gómez-Martínez, Óscar De los Reyes Marín
article en

Abstract

The Financial Lobster Bias describes how SMEs, driven by distorted liquidity perceptions, engage in aggressive expansion until financial breakdown occurs. Using data from 10,412 Spanish SMEs (2000–2024), this study shows that liquidity misperception—measured through two versions of the Liquidity Misperception Index (PEL), one based on financial structure and another on payment–collection timing (PMP–PMC)—is a significant driver of expansion–collapse cycles. The financial PEL displays a strong temporal trend (R2 = 0.736), while the PMP–PMC-based PEL also increases over time (R2 = 0.411), evidencing a persistent widening between perceived and real liquidity. The Illusory Confidence in Liquidity Index (ICEL) reveals that confidence peaks coincide with periods of systemic fragility. The Unsustainable Expansion Index (IEI) identifies pre-crisis overexpansion (IEI = 2.34 in 2005; 2.87 in 2006; 1.72 in 2007), preceding the 2008 failure surge. Together, these indicators provide early-warning mechanisms that uncover hidden fragility and help anticipate liquidity-driven collapse.

International Journal of Financial StudiesVol. 14(1)
Universidad Rey Juan Carlos (ES), Universidad Internacional De La Rioja (ES)
Openalex Percentile: Top 94%
Working Capital and Financial Performance
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