Investigating the mediating role of growth opportunities on the relationship between managers' overconfidence and investment efficiency

Subject Areas : Journal of Investment Knowledge

Afshin shalchi ¹ , Zadollah Fathi ² , Hossein Shafiei ³

1 - Departement of Accounting, Sirjan Branch, Islamic Azad University, Sirjan, Iran
2 - Departement of Accounting, Central Tehran Branch, Islamic Azad University, Tehran, Iran.
3 - Departement of Accounting, Sirjan Branch, Islamic Azad University, Sirjan, Iran.

Received: 2019-11-04 Accepted : 2020-02-01 Published : 2022-06-22

Keywords: Investment Efficiency, Growth Opportunities, Keywords: Managers' overconfidence,

Abstract :

AbstractThe purpose of this study is to investigate the mediating role of growth opportunities on the relationship between managers' overconfidence and investment efficiency. Given that investing is the process of making a decision that managers use to identify projects that add value to the company, managers' mental states, including those of managers' overconfidence, play a significant role in selecting investment projects. On the other hand, managers' over-confident influence on investment efficiency can be indirectly influenced by growth opportunities. This research is causal, post-event and applied. To conduct this research, a sample of 156 companies listed in Tehran Stock Exchange during the period 2009-2018 was selected. Based on the combined data method and multivariate linear logistic regression analysis, the research findings showed that managers' overconfidence leads to increase / decrease of over / under investment. Also, according to Baron & Kenny (1986), managers' trust is influenced not only directly but also indirectly by growth opportunities.

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