TY - JOUR
T1 - Managerial myopia and corporate financialization
T2 - Evidence from China
AU - Zhang, Cheng
AU - Liu, Cheng
AU - Ma, Yaoying
AU - Yang, Chunhong
PY - 2025/2
Y1 - 2025/2
N2 - While managerial characteristics significantly impact corporate strategies, the role of managerial myopia in corporate financialization remains underexplored. Using data from a sample of 20,881 firm-year observations of Chinese firms from 2007 to 2019, we examine how managerial myopia influences corporate financialization. We find that managerial myopia promotes corporate financialization. The results are robust to various measures of financialization, alternative specifications, and considerations of endogeneity. Further analysis reveals that external supervision, indicated by analyst attention and institutional investor shareholdings, mitigates the positive effect of managerial myopia on corporate financialization. By contrast, corporate pressures, such as default risk and competitive pressure, amplify the tendency toward financialization. © 2024 John Wiley & Sons Ltd.
AB - While managerial characteristics significantly impact corporate strategies, the role of managerial myopia in corporate financialization remains underexplored. Using data from a sample of 20,881 firm-year observations of Chinese firms from 2007 to 2019, we examine how managerial myopia influences corporate financialization. We find that managerial myopia promotes corporate financialization. The results are robust to various measures of financialization, alternative specifications, and considerations of endogeneity. Further analysis reveals that external supervision, indicated by analyst attention and institutional investor shareholdings, mitigates the positive effect of managerial myopia on corporate financialization. By contrast, corporate pressures, such as default risk and competitive pressure, amplify the tendency toward financialization. © 2024 John Wiley & Sons Ltd.
KW - analyst attention
KW - distance to default
KW - financialization
KW - institutional investors
KW - managerial myopia
UR - http://www.scopus.com/inward/record.url?scp=85204798845&partnerID=8YFLogxK
UR - https://www.scopus.com/record/pubmetrics.uri?eid=2-s2.0-85204798845&origin=recordpage
U2 - 10.1111/jifm.12222
DO - 10.1111/jifm.12222
M3 - RGC 21 - Publication in refereed journal
SN - 0954-1314
VL - 36
SP - 184
EP - 214
JO - Journal of International Financial Management and Accounting
JF - Journal of International Financial Management and Accounting
IS - 1
ER -