Business

Earnings management and financial distress or soundness determining CEOs' future over- and under-investment decisions

S. Sumiyana, A. Na'im, et al.

Explore the riveting insights from the research conducted by Sumiyana Sumiyana, Ainun Na'im, Firdaus Kurniawan, and Albertus H. L. Nugroho, which delves into how CEOs' over-confidence impacts their investment decisions amidst financial distress. This study sheds light on the often-overlooked connection between future earnings management and investment strategies in developing countries.

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Playback language: English

Index

Abstract

This study investigates the association between CEOs' over-confidence in experiencing financial distress or soundness, future earnings management, and over and under-investment decisions. It examines how financial distress (soundness) influences the relationship between earnings management and over (under)-investment decisions, addressing a literature gap concerning intentional earnings management for future investment decisions in developing countries. The study uses prospect theory, framing, conservatism, and psychological projection to explain CEOs' future investment decisions, considering the influence of financial distress or soundness on this association in an international setting.

Publisher

Humanities and Social Sciences Communications

Published On

Apr 12, 2023

Authors

Sumiyana Sumiyana, Ainun Na'im, Firdaus Kurniawan, Albertus H. L. Nugroho

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