Journal of Accounting and Management Vision

Journal of Accounting and Management Vision

The effect of the CEO's financial background on the company's financialization with the role of managerial overconfidence and financing constraints in companies listed on the Tehran Stock Exchange.

Document Type : Original Article

Authors
fatemeh alizadeh malvani 1
aliakbar rajabi 2
saman khorshid 3
1 Master's degree student in Accounting, Parandak Institute of Higher Education, Saveh, Iran.
2 Assistant Professor, Department of Accounting, Varamin-Pishva Branch, Islamic Azad University, Pishva, Iran.
3 Accounting Department, Parandak Institute of Higher Education, Saveh, Iran.
Abstract
The present study aimed to investigate the effect of CEO financial background on financialization of companies listed on the Tehran Stock Exchange and to investigate the moderating role of managers’ overconfidence and financing constraints on this relationship. The theoretical foundations of the study were based on six main theoretical frameworks including shareholder value theory, agency theory, top-down hierarchy theory, financial behavioral decision-making theory, human capital theory, and conservatism theory. The statistical population of the study included 114 companies during the years 2019-2024 and 684 observations. The research data were collected from the companies’ financial reports and CSR disclosures and analyzed using multivariate regression models. The findings showed that CEO financial background has a positive and significant effect on companies’ financialization. Second, managers’ overconfidence positively moderates the relationship between CEO financial background and financialization. Third, financing constraints negatively moderate the relationship. Based on the findings, practical suggestions are provided for investors, creditors, and corporate boards.
Keywords
CEO financial records
corporate financialization
managers' overconfidence
financing constraints
Subjects