Investigating Relationship between Managerial Ability and Speed of Capital Structure Adjustment: considering the role of Managerial Overconfidence

Subject Areas :

Ommolbanin Dadar ¹ (Associate Prof., Accounting Department, South Tehran Branch, Islamic Azad University, Iran.)
Mohammad Mohammadi konjali ² (-)

Received: 2023-05-14 Accepted : 2023-08-07 Published : 2023-01-21

Keywords: Capital Structure, Logistic regression, managerial ability, Managerial overconfidence, Speed of Capital Structure Adjustment,

Abstract :

Capital structure is a key financial aspect of company management, which refers to the composition and ratio of the company's capital value and is the result of the company's financing activities. The purpose of this study was to investigating the relationship between the managerial ability and speed of capital structure adjustment, considering the role of managerial overconfidence. the type of research is descriptive and correlational, from the purpose dimension is type of applied research, and the method of data collection is type of post-event data, that has been used the database Tehran Stock Exchange. Based on conditions considered for sampling, selected 124 companies by systematically eliminated during the years 1391 to 1399 (solar year), and test the hypotheses using by multiple regression. Findings show that management ability increases the speed of capital structure adjustment, also managerial overconfidence can have a direct effect on this relationship. These findings highlight the role of managerial ability and overconfidence in decisions related to capital structure.related to capital structure.