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...

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Bibliographic Details
Published inPloS one Vol. 19; no. 9; p. e0309140
Main Authors Chen, Yanchi, Ye, Ju, Shi, Qi
Format Journal Article
LanguageEnglish
Published United States Public Library of Science 05.09.2024
Public Library of Science (PLoS)
Subjects
Analysis
Annual reports
Arbitrage
Behavior
Biology and Life Sciences
China
Commerce - economics
Corporate governance
Corporations
Decision making
Economic growth
Famine
Finance
Financial Management
Humans
Influence
Investments
Literature reviews
Macroeconomics
Managers
Medicine and Health Sciences
Myopia
Physical Sciences
Research and Analysis Methods
Research methodology
Resource allocation
Social Sciences
Stagnation
Stockholders
China
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Summary: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.
Bibliography:ObjectType-Article-1
SourceType-Scholarly Journals-1
ObjectType-Feature-2
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Competing Interests: The authors have declared that no competing interests exist.
ISSN:1932-6203
1932-6203
DOI:10.1371/journal.pone.0309140