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Financial Risk and Management Reviews

June 2016, Volume 2, 1, pp 1-25

Does Managerial Emotional Biases Affect Debt Maturity Preference? Bayesian Network Method: Evidence from Tunisia

AZOUZI Mohamed Ali

,

JARBOUI Anis

AZOUZI Mohamed Ali 1

JARBOUI Anis 2

  1. Assistant Professor in Finance and Accounting Methods Higher Institute of Business Administration (ISAAS) University of Sfax, Tunisia 1

  2. Doctor and HDR financial and accounting Associate Professor of Universities Higher Institute of Business Administration (ISAAS) University of Sfax, Tunisia 2

Pages: 1-25

DOI: 10.18488/journal.89/2016.2.1/89.1.1.25

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Abstract:

This study documents that managerial characteristics’ play an important role in determining corporate debt maturity. Specifically, we focus on the relationship between the managerial biases and firm debt maturity preference. Empirical analysis of the relationship between emotional bias and debt maturity using Bayesian Network Method. We distributed a questionnaire among 100 Tunisian managers to measure their emotional biases. Our results have revealed that the behavioral analysis of debt maturity preference implies leader affected by behavioral biases (optimism, loss aversion, and overconfidence) presence prefer long term debt maturity allowing this protect against the takeover operation Russianness.

Contribution/ Originality
The paper pushing organizations managers to choose according to their emotional level (applied emotional capacity test up psychometric testing). In addition, it increases the validity of inferences from the research. This paper incites governments to establish training programs aimed at the development of learning of emotional capacity.

Keywords:

Emotional biases, Debt maturity, Behavioral corporate finance, Bayesian network, Managerial characteristics.

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