Manager's money character and firm capital structure decisions

Subject Areas : Journal of Capital Market Analysis

Ali Beidaghi ¹ , mohammadreza vatanparast ² , Mehrdad Sadr Ara, ³

1 - PhD student, accounting department, Rasht Branch, Islamic Azad University, Rasht, Iran
2 - Assistant Professor, Accounting Department, Rasht Branch, Islamic Azad University, Rasht, Iran
3 - Assistant Professor of Accounting, Faculty of Literature and Humanities, University of Guilan, Guilan, Iran

Received: 2023-07-06 Accepted : 2023-09-16 Published : 2023-08-23

Keywords: Managers, Debt, Equity, Money Character,

Abstract :

Based on behavioral studies, managers’ personality traits are effective in their decision-making and behaviors. The objective of this research was to study the impact of managers’ monetary personality on decisions of companies’ capital structure. The questionnaire and the audited financial statements have been used to collect data in this research. The study population includes the financial managers of companies listed on the Tehran Stock Exchange in 2021. Also, the studied sample was selected using the convenience sampling method. Using Morgan's table, the research sample size was estimated as 183 subjects; however, 141 usable questionnaires were ultimately collected. The multivariate regression technique with a cross-sectional data structure was used for data analysis. The results failed to find a significant relationship between the money-avoider personality using debt and stock in the capital structure of companies. Moreover, the money-worship personality was found to have a positive relationship using the stock in the capital structure, while the money-status personality showed a negative relationship using the stock in the capital structure. In addition, a money-vigilance personality revealed a positive relationship using the debt in the capital structure. By taking into account the monetary personality of the managers besides other criteria and becoming aware of its impact on the capital structure policies, capital market actors would be able to make more accurate predictions of the company's future and reduce the conflict of interest between shareholders and managers. Hence, the research results can improve the decision-making of people.