An Exploratory Study of Four Corporate Financial Decisions: Behavioural Aspects and Traditional Aspects.

• Main Authors: Shi-Mo Liao, 廖士模
• Other Authors: Gow-liang Huang
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/vf242g

碩士 === 國立高雄第一科技大學 === 金融營運所 === 96 === Traditional finance theory is based on the two hypotheses: rational agents and efficient market hypothesis. However, while scholars get a deeper thought of the function of the capital market and the behavior of investors, scholars find that on the one hand, these two hypotheses are not in accord with the fact, on the other hand, some anomalies that traditional finance theory can not explain appear in the market. Hence behavioral finance theory comes into being. Since 1980’s, the appearance and development of behavioral finance theory have given a great impact to traditional finance theory and behavioral finance theory became a research field that attracted pervasive attention. Most of the existing studies of behavioral finance focus on the explanation of unusual phenomena in security market with behavioral finance theory , and these studies examine the effects of investors’ biases on the behavior of the financial markets. But behavioral finance theories are seldom applied in corporate financial management issues, this kind of research examine the effects of managerial and investor psychological biases on a firm’s corporate finance decisions. The emerging research in this part is relatively young. We separated these corporate financial management issues into four parts, including capital structure（i.e. finance）, capital budgeting（i.e. investment）, mergers and acquisitions, and dividend policy. In this paper, we cast the existing research of the application of behavioral finance theories in corporate financial management systematically, and compare behavioral finance theory with traditional finance theory. Additionally, this study uses several case study to analysis the irrational manager’s behavior biases while making financial decisions. These finance decisions can not satisfy the principle of maximizing the value of corporate, and these probably will have negative influence on the corporate performance.