scholarly journals Causative dynamics of overconfidence, optimism, framing effects and demographic attributes as capital structure determinants for publicly listed firms in Indonesia

Accounting ◽  
2022 ◽  
Vol 8 (2) ◽  
pp. 123-138 ◽  
Author(s):  
David Rimbo Lim ◽  
Hendrawan Supratikno ◽  
Gracia Shinta S. Ugut ◽  
Edison Hulu
Keyword(s):  
Decision Making ◽  
Capital Structure ◽  
Structural Equation ◽  
Framing Effect ◽  
Decision Makers ◽  
Pecking Order ◽  
Listed Firms ◽  
Equation Modelling ◽  
Structure Determinations ◽  
Demographic Attributes

This study examines whether capital structure determinations by Indonesian publicly listed firms (Tbks) are influenced by the behavioural biases of overconfidence and optimism, with the underlying rationality frameworks being framed by relevant financial information and impacted by decision-makers’ demographic attributes. Data were obtained from survey respondents and statistically analysed using partial least squares structural equation modelling to identify the indicators of causative dynamics within the hypothesised relationships. Sampled Tbks’ management (CEOs/CFOs) displayed the inherent behavioural traits of overconfidence and optimism in their capital structure determinations. However, such behavioural variables were not statistically proven to significantly influence capital structure decision-making and, hence, were not validated as capital structure determinants. The pecking order framework was revealed to have a significant framing effect on capital structure decision-making by sampled managers. Sampled managers’ demographic attributes and backgrounds were found to be capital structure determinants but did not have a mediating or moderating influence on the modelled relationship between behavioural variables and capital structure.

Export stimuli revisited: The influence of the characteristics of managerial decision makers on international behaviour

2011 ◽  
Vol 29 (6) ◽  
pp. 648-670 ◽  
Author(s):  
Francisco J. Acedo ◽  
José L. Galán
Keyword(s):  
Decision Making ◽  
Structural Equation ◽  
Theory Of Planned Behaviour ◽  
Personal Characteristics ◽  
Decision Makers ◽  
Survey Questionnaire ◽  
Managerial Decision ◽  
Planned Behaviour ◽  
Psychological Variables ◽  
Equation Modelling

Utilizing the theory of planned behaviour (TPB), this article proposes and tests relationships among the nature of export stimuli, the personal characteristics of decision makers and the decisions they make with regard to internationalization. The conceptual model for the study includes psychological variables that might condition owner-managers’ decision-making responses to such export stimuli. Using structural equation modelling, the study analyses data obtained by a survey questionnaire from 110 Spanish small- and medium-sized enterprises. The analysis reveals the importance of two particular variables, the perception of risks and opportunities in exports and the decision maker’s proactiveness, in determining the export stimuli and how these in turn affect the international behaviour of firms.

scholarly journals THE EFFECT OF COGNITIVE AND EMOTIONAL BIASES ON THE CAPITAL STRUCTURE DECISIONS: A LITERATURE REVIEW

2014 ◽  
Vol 8 (2) ◽  
Author(s):  
Tekin Bilgehan ◽  
Gor Yusuf
Keyword(s):  
Decision Making ◽  
Capital Structure ◽  
Behavioral Finance ◽  
Point Of View ◽  
Decision Makers ◽  
Empirical Literature ◽  
Behavioral Characteristics ◽  
Strategic Choices ◽  
Emotional Process ◽  
The Capital Structure

Each decision-making process is an important cognitive and emotional process which is open to the emotional effect. Individuals make a decision about a future uncertainty either to feel good or maximizing gain by minimizing the loss ratio. Recently, researches in finance have criticized that the capital structure decisions and firms’ funding and strategic choices deviate from the traditional neoclassical paradigm. Furthermore there is a nascent empirical literature that has exposed interesting evidence of the effects of managerial behavioral biases. Managers’ decisions, that to create the capital structure, have a vital importance for the company. The behavioral finance (BF) approach may be revealed useful results in the process of solving decision-makers’ behaviors and thoughts. In this context the purpose of this study is to reveal if the managers are affected by their behavioral characteristics in the process of the financing decision-making, based on the findings of studies in the literature. From this point of view behavioral finance literature, which is about the financing and capital structure decisions, is investigated. As a result, theoretical and empirical analyses, which discussed in the literature, show that managers’ biases play an important role in explaining the capital structure choice.

scholarly journals Do DJIA Firms Reflect Stationary Debt Ratios?

Economies ◽  
2020 ◽  
Vol 8 (4) ◽  
pp. 76
Author(s):  
Feng-Li Lin
Keyword(s):  
Capital Structure ◽  
Stationary Processes ◽  
Debt Ratio ◽  
Pecking Order ◽  
Trade Off ◽  
Listed Firms ◽  
Growth Opportunity ◽  
Dow Jones Industrial Average ◽  
The Mean ◽  
The Stability

To form optimum firm capital structure strategies to face unanticipated economic events, firm managers should understand the stability of a firm’s capital structure. The aim of this research was to study whether the debt ratio is stationary in listed firms on the Dow Jones Industrial Average (DJIA). Two vital capital structure concepts regarding pecking order and trade-off theory are fairly contradictory. Using opposing theoretical contexts, the Sequential Panel Selection Method apparently categorizes which and how many series are stationary processes in the panel. This method was used to test the mean reverting properties of the 25 companies listed on Dow Jones Industrial Average between 2001 and 2017 in this study, which is expected to fill the current gap in the literature. The overall results show that stationary debt ratios exist in 10 of the 25 studied firms, supporting the trade-off theory. Moreover, the 10 firms utilizing trade-off theory are affected by firm size, profitability, growth opportunity, and dividend payout ratio. These results provide vital information for firms to certify strategies to optimize capital structure.

scholarly journals A Confirmatory Evaluation of an Educational Orientation Tool for Pre-University Students

2019 ◽  
Vol 9 (4) ◽  
pp. 285
Author(s):  
María del Carmen Olmos-Gómez ◽  
Mónica Luque-Suárez ◽  
Jesús Manuel Cuevas-Rincón
Keyword(s):  
Decision Making ◽  
Structural Equation ◽  
Goodness Of Fit ◽  
Peer Groups ◽  
Working Life ◽  
Measurement Tool ◽  
Decision Making Process ◽  
Equation Modelling ◽  
Confirmatory Factor ◽  
Valid Instrument

This study incorporates the design and validation of a questionnaire for the evaluation of Careers Advisory Services and the systematic processes that influence it (family, peer groups, socioeconomic status, etc.). In addition, it examines its psychometric properties within a multicultural population of students attending educational centres in the south of Spain. It seeks to create a valid instrument that is reliable as a measurement tool and useful for evaluating decision making situations relevant to the future working context. A perspective of working life is given through consideration of the degree choices made by those involved in the decision-making process. The metrics used showed high content and construct validity. Structural equation modelling (SEM) and confirmatory factor analysis (CFA) were employed. Indicators described by Wald and Lagrange were used to examine and modify the model in order to obtain a model that best fits relevant theory and goodness of fit criteria.

scholarly journals How to Determine the Influencing Cultural Factors on the Strategic Decision-Making Process in the Banking Sector?

2017 ◽  
Vol 8 (1) ◽  
pp. 37 ◽  
Author(s):  
Nizar Raissi ◽  
Anas Hakeem
Keyword(s):  
Decision Making ◽  
Structural Equation ◽  
Banking Sector ◽  
Strategic Decision ◽  
Cultural Management ◽  
Equation Modelling ◽  
Bank Managers ◽  
Banking Institutions ◽  
Cross Cultural Management ◽  
Intervening Variables

This article studies the cross-cultural management research on the value and strategies adopted by bank managers while making banking decisions. Although, the study relied on testing causal relationships hypothesised in the research framework of multiple independent and intervening variables. To achieve this, a Structural Equation Modelling technique, was used to analyse the data collected from the survey of 200 respondents from 15 banking institutions. The findings show that the knowledge of bank managers is positively associated with the speed of the SDMP and participation. Likewise, the speed of decision making (SDM) is positively associated with the beliefs, attitudes and values of the top management team. Finally, the laws as a determinant of culture are positively associated to SDM and the degree of rationality.

A Survey on Capital Structure Decisions of Hong Kong Firms

2000 ◽  
Vol 03 (03) ◽  
pp. 347-365 ◽  
Author(s):  
Dennis K. K. Fan ◽  
Raymond W. So
Keyword(s):  
Hong Kong ◽  
Capital Structure ◽  
Information Asymmetry ◽  
Firm Size ◽  
Pecking Order ◽  
Listed Firms ◽  
Financing Decisions

In this paper, the results of a survey on capital structure decisions of Hong Kong listed firms are reported. It is found that Hong Kong firms conformed more to the "pecking order" principle than a target long term debt-equity mix in their financing decisions. Financial managers' preferences over alternative capital raising instruments are also investigated. The degree of information asymmetry and firm size are found to have impacts on the ranking of some factors governing capital structure decisions. However, signaling motivation does not play a role in managers' financing decisions.

scholarly journals BEHAVIOURAL MODEL FOR DECISION-MAKERS’ INTENTION TO ADOPT GREEN INFORMATION TECHNOLOGY IN NIGERIAN MANUFACTURING INDUSTRIES

2020 ◽  
Vol 2 (2) ◽  
pp. 166-171
Author(s):  
Abba Kyari Buba ◽  
Othman Bin Ibrahim
Keyword(s):  
Structural Equation ◽  
Decision Makers ◽  
Manufacturing Industries ◽  
Green It ◽  
Intention To Adopt ◽  
Equation Modelling ◽  
Activation Theory ◽  
Norm Activation Theory ◽  
Data Validity ◽  
Green Information Technology

Environmental degradation has become a critical concern around the world. This study will investigate the influence of managers’ behavior in decision making regarding intention to adopt Green IT. The research will integrate the Theory of Planned Behaviour (TPB) and the Norm Activation Theory (NAT) to the explore factors that affect decision-makers’ intention to adopt Green IT in Nigerian Manufacturing Industries. In this study, quantitative approach will be employed in collecting data through a survey. By employing a non-random sampling, a survey will be conducted among decision makers. Partial Least Squares Structural Equation modelling (PLS-SEM) method will test consistency, reliability and data validity.  The outcome of this research could be significant in helping decision makers to adopt Green IT successfully.

scholarly journals Does government policy matter? Factors influencing contractors' risk attitudes in the Malaysian construction industry: A structural equation modelling analysis

2020 ◽  
Vol 10 (1) ◽  
pp. 1-29
Author(s):  
Taofeeq Moshood ◽  
◽  
Adekunle Adeleke ◽  
Gusman Nawanir ◽  
Jibril Bamgbade ◽  
...  
Keyword(s):  
Construction Industry ◽  
Government Policy ◽  
Structural Equation Modelling ◽  
Structural Equation ◽  
Construction Projects ◽  
Decision Makers ◽  
Risk Attitudes ◽  
Personal Factors ◽  
Factors Affecting ◽  
Equation Modelling

One of the critical factors responsible for the successful management of construction projects is individual factors. These factors play a significant role in the decision-makers' attitudes towards risks management. Many previous studies regarding the management of construction projects have focusedon the factors contributing to the success of risk management. However, little attention has been given to factors severely affecting the decision-makers' risk attitudes with particular reference to an individual's risk factors in the construction industry. Therefore, this study aims to identify the factors affecting contractors' risk attitudes and then determine its relationship with government policy. Theoriesof planned behaviour and organisational control wereused to develop the theoretical framework that investigated G-7 contractors in the Kuantan Pahang, Malaysian construction industry. A review of relevant literature and questionnaire was employedto identify the factors affecting contractors' risk attitudes (personal factors). 112copies of a structured questionnaire were analysed with a response rate of 80%. Structural Equation Modelling SEM was utilised to test the hypotheses developed for the study. The results of this study,through SEM,proved that personal factors (working experience, professional competence and physical health) have a significant influence on contractor risk attitudes in the Malaysian construction industry. The findings of this research also confirm that government policy (rules and regulations) plays a moderating role in enhancing the relationship of personal factors affecting contractors’ risk attitudes in construction companies in Malaysia. The findings of the study provide more understanding of the personal factors that affect contractors' risk attitudes to facilitate contractors' decision-making process and serve as a useful reference for further studies in the field of construction project management.

scholarly journals IMPACT OF DYNAMIC STRATEGIC CAPABILITIES ON STRATEGIC ENTREPRENEURSHIP IN PRESENCE OF OUTSOURCING OF FIVE STARS HOTELS IN JORDAN

2020 ◽  
Vol 21 (2) ◽  
pp. 578-587
Author(s):  
Sulieman Ibraheem Al-Hawary ◽  
Mohammad Sultan Al-Syasneh
Keyword(s):  
Structural Equation ◽  
Training Programs ◽  
Decision Makers ◽  
Strategic Entrepreneurship ◽  
Equation Modelling ◽  
Top Managers ◽  
Strategic Capabilities ◽  
The Impact ◽  
The Relationship

This research aims to investigate whether outsourcing mediates the impact of dynamic strategic capabilities on strategic entrepreneurship. The population of the research consists of top managers in five stars hotels. A sample of 215 respondents were selected for the research in which 186 questionnaires were valid for statistical analysis. Structural equation modelling (SEM) was used to test the hypotheses of the research. The results of the research indicate that outsourcing does not mediate the relationship between dynamic strategic capabilities and strategic entrepreneurship. All the dimensions of dynamic strategic capabilities have a statistical impact on strategic entrepreneurship, while the dynamic strategic capabilities dimension all affect outsourcing except the seizing capability. Based on the research results, managers and decision-makers have to focus on innovation functions by enhancing the role of knowledge management and R&D activities, as well as concentrate on employees training programs.

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