A THEORETICAL CONTRIBUTION OF SME MANAGER’S OVERCONFIDENCE BIAS IN WORKING CAPITAL MANAGEMENT AND PERFORMANCE

• Main Authors: Jeff, Lamptey, Asri, Bin Marsidi, Lonas, Ladime
• Format: Article
• Language: English
• Published: Allied Business Academies 2021
• Subjects: H Social Sciences (General); HB Economic Theory
• Online Access: http://ir.unimas.my/id/eprint/37641/1/overconfidence-1.pdf; http://ir.unimas.my/id/eprint/37641/; https://www.abacademies.org/special-issues/volume-27-special-issue-5-title-entrepreneurship-and-economics.html
• Institution: Universiti Malaysia Sarawak

We argue that managerial overconfidence bias affects working capital management. Overconfident SME managers overestimate their sales growth and underestimate the volatility of cash flow of their firms and thus overinvest in inventory for higher returns if they have enough personal capital or chea...