Moderating Role of Board Diversity and Financial Reporting Complexity in Relation between management Overconfidence on the Financing Decisions In the Iranian Capital Market

Subject Areas : Financial and Behavioral Researches in Accounting

shokoufeh etebar ¹ , Hossein Jannat Makan ² , علی تامرادی ³

1 - College of Skills and Entrepreneurship, Karaj Branch, Islamic Azad University, Karaj, Iran
2 - 2Department of Accounting, Faculty of Accounting, Azad University of Ahvaz, Iran
3 - مربی حسابداری، دانشگاه پیام نور رامهرمز، رامهرمز، ایران

Received: 2024-11-19 Accepted : 2025-01-12 Published : 2024-12-31

Keywords: Management overconfidence, financing decisions, board diversity, financial reporting complexity,

Abstract :

The aim of the present study is to investigate the moderating role of board diversity and financial reporting complexity on the relationship between management overconfidence and financing decisions in the Iranian capital market. Data from 145 sample companies were collected between 2015 and 2021 and tested using multivariate regression based on combined data (panel and random effects). The research results showed that, Management overconfidence has a significant positive effect on debt financing decisions, so with increasing management overconfidence, debt financing decisions in companies increase and there is also a significant relationship between the complexity of financial reporting and financing decisions. There is also a significant and positive relationship between the diversity of the company's board of directors and financing decisions, and there is a significant and negative relationship between the complexity of financial reporting and financing decisions of companies listed on the Tehran Stock Exchange. Board diversity moderates the relationship between management overconfidence and financing decisions (significant and positive relationship), so board diversity moderates and reduces the positive relationship between management overconfidence and financing decisions, but increasing the complexity of financial reporting does not moderate the positive relationship (non-significant and negative relationship) between management overconfidence and financing decisions.

 

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