AN INTRODUCTION TO BEHAVIORAL CORPORATE FINANCE

Vasile Dedu (), Turcan Ciprian Sebastian () and Turcan Radu ()
Additional contact information
Turcan Ciprian Sebastian: Doctorand Academia de Studii Economice, FABBV Scoala doctorala
Turcan Radu: Universitatea din Oradea, Facultatea de Stiinte Socio-Umane

Annals of Faculty of Economics, 2012, vol. 1, issue 2, 471-476

Abstract: The purpose of this paper is to reflect the behavioral aspects that govern corporations. The paper briefly presents some of the main pillars of behavioral corporate finance: management, closed – end funds puzzle, dividends and the importance of aggregate earnings releases. The first pillar consists in a brief presentation of the behavioral factors related to the management of corporations, such as the fact that independent directors are not that independent as they should be, they do not have the prerequisite expertise for assessing complex financial risks, the importance of ethics and having a corporate culture that nurtures doing the right thing above anything else and the fact that CEO’s decisions reflect in good part, their personal style rather than a set of criteria determined by the company. In the second part of the paper, it is treated the puzzle why would investors buy a closed-end fund at its IPO price, knowing that it is likely to fall to a discount, when they could buy instead an open-end fund that is guaranteed always to trade at par and some mentions about the way that dividend policy may be influenced by managers “catering” to the demands of investors and also the effects of aggregate earnings announcements over the market returns.

Keywords: Behavioral finance; conflicts of interests; corporate finance; managers; dividends; closed-end fund puzzle; aggregate earnings (search for similar items in EconPapers)
JEL-codes: D22 D23 D82 G20 G32 G34 G35 M12 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://anale.steconomiceuoradea.ro/volume/2012/n2/069.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ora:journl:v:1:y:2012:i:2:p:471-476

Access Statistics for this article

More articles in Annals of Faculty of Economics from University of Oradea, Faculty of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Catalin ZMOLE ( this e-mail address is bad, please contact ).