Journal
COMPLEXITY
Volume 2021, Issue -, Pages -Publisher
WILEY-HINDAWI
DOI: 10.1155/2021/5513204
Keywords
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Funding
- Anhui Provincial Department of Education Quality Engineering Project (Planning Textbook), Economic Benefit Audit [2017ghjc119]
- Anhui Provincial Department of Education Quality Engineering Project (MOOC), Audit [2018mooc055]
- Major Project of the Key Research Base of Humanities and Social Sciences of the Ministry of Education Accounting Measurement Model, Report Model and Enterprise Comprehensive Report [16JJD790035]
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The study found that overconfident managers in companies adopting fair value measurement are more likely to make aggressive debt decisions, indicating that fair value measurement has a positively regulatory effect on overconfident managers.
Adopting fair value measurement may bring more earnings fluctuations and induce irrational psychology and radical financing behavior of managers. Based on behavioral corporate governance theory, using the sample of Chinese A-share nonfinancial listed companies during 2007-2017, this paper empirically examines the regulatory effect of fair value measurement, that is, whether fair value measurement affects the company's financing decisions when managers have irrational psychological characteristics, i.e., overconfidence. The study found that overconfident managers of the company that have fair value measurement assets will be more aggressive for debt decisions, indicating that fair value measurement has a positively regulatory effect on overconfident managers.
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