Abdel-Khalik, Shimaa Abdel-Moniem; Abulezz, Mohamed E.; Samaan, Ahmed M.
Shake
A icle
The mode a ing e ec o in es men oppo uni ies on
he ela ion be ween analys co e age and manage ial
myopia: e idence om Egyp
Cogen Business & Managemen
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Sugges ed Ci a ion: Abdel-Khalik, Shimaa Abdel-Moniem; Abulezz, Mohamed E.; Samaan, Ahmed M.
Shake (2024) : The mode a ing e ec o in es men oppo uni ies on he ela ion be ween analys
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The mode a ing effec o in es men
oppo uni ies on he ela ion be ween analys
co e age and manage ial myopia: e idence om
Egyp
Shimaa Abdel-Moniem Abdel-Khalik, Mohamed E. Abulezz & Ahmed M.
Shake Samaan
To ci e his a icle: Shimaa Abdel-Moniem Abdel-Khalik, Mohamed E. Abulezz & Ahmed M.
Shake Samaan (2024) The mode a ing effec o in es men oppo uni ies on he ela ion
be ween analys co e age and manage ial myopia: e idence om Egyp , Cogen Business &
Managemen , 11:1, 2371550, DOI: 10.1080/23311975.2024.2371550
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The mode a ing e ec o in es men oppo uni ies on he ela ion
be ween analys co e age and manage ial myopia: e idence om
Egyp
shimaa Abdel-Moniem Abdel-Khalik, Mohamed e. Abulezz and Ahmed M. shake samaan
accoun ing Depa men , Facul y o Comme ce, Zagazig uni e si y, Zagazig, egyp
ABSTRACT
he pu pose o his s udy is o in es iga e whe he analys co e age is associa ed wi h
manage ial myopia. Mo eo e , he e ec o he in e ac ion be ween analys co e age
and in es men oppo uni ies on manage ial myopia is also in es iga ed. We used da a
o 100 companies lis ed on he egyp ian s ock exchange o he pe iod 2014–2019. he
esul s indica e ha analys co e age exace ba es manage ial myopia. his esul is
consis en wi h he inancial analys s’ p essu e ole, which indica es ha analys co e age
imposes excessi e p essu e on manage s o achie e sho - e m goals and he eby
exace ba es manage ial myopia. Fu he mo e, his s udy inds ha he in e ac ion
be ween analys co e age and in es men oppo uni ies alle ia es manage ial myopia.
his esul is consis en wi h he inancial analys s’ moni o ing ole, which sugges s ha
inancial analys s, by ac ing as e ec i e moni o s, mi iga e manage ial myopia.
1. In oduc ion
he pu pose o his s udy is o in es iga e whe he analys co e age is associa ed wi h manage ial myo-
pia. Manage ial myopia is he endency o manage s o a emp o induce inc eases o s ock p ice by
boos ing cu en ea nings a he expense o long- e m objec i es (s ein, 1988). his implies unde in es -
men in iable long- e m p ojec s, educ ion o disc e iona y expenses (e.g. &D), o aking exagge a ed
isks wi h he objec i e o achie ing sho - e m goals (Dallas, 2012). As such, manage ial myopia may
dec ease i m alue and he eby sha eholde s’ weal h.
ex an li e a u e sugges s ha his ela ion is a he complex: o i may depend on he pa icula ole
inancial analys s’ co e age plays. h ee dis inc oles o inancial analys s’ co e age a e gene ally iden i-
ied: moni o ing, in o ma ional, and p essu e oles. Fi s , inancial analys s ha e expe ience wi h he busi-
nesses hey co e in addi ion o accoun ing and inance aining. Also, hey ollow i ms on a egula
basis, which enables hem o inspec managemen beha io s and decisions on a con inuous basis. hence,
analys s moni o i ms’ manage s and e ec i ely in luence hei decision-making (chen e al., 2015;
Degeo ge e al., 2013; Doukas e al., 2008; i ani & oesch, 2013; sun, 2009; Yu, 2008). his is e e ed o
as he inancial analys s’ moni o ing ole.
second, inancial analys s ha e he abili y o ga he , e alua e, and deli e co po a es’ in o ma ion o
in es o s and o he s akeholde s. hence, hey dilu e in o ma ion asymme y be ween manage s and in es-
o s and he eby add alue o he inancial ma ke and enhance ma ke e iciency (De ien & Kecskés, 2013;
© 2024 he au ho (s). Published by in o ma uK Limi ed, ading as aylo & F ancis g oup
CONTACT shimaa abdel-Moniem abdel-Khalik [email p o ec ed]om accoun ing Depa men , Facul y o Comme ce,
Zagazig uni e si y, Zagazig, egyp .
his is an open access a icle dis ibu ed unde he e ms o he C ea i e Commons a ibu ion License (h p://c ea i ecommons.o g/licenses/by/4.0/), which
pe mi s un es ic ed use, dis ibu ion, and ep oduc ion in any medium, p o ided he o iginal wo k is p ope ly ci ed. he e ms on which his a icle has been
published allow he pos ing o he accep ed Manusc ip in a eposi o y by he au ho (s) o wi h hei consen .
ARTICLE HISTORY
ecei ed 30 no embe
2023
e ised 26 Janua y 2024
Accep ed 17 June 2024
KEYWORDS
Manage ial myopia;
analys co e age;
in es men oppo uni ies;
he moni o ing ole; he
in o ma ional ole; he
p essu e ole
REVIEWING EDITOR
no shaipah Abdul
Wahab, aylo ’s uni e si y
– lakeside campus,
Malaysia
SUBJECTS
Accoun ing; co po a e
go e nance; Finance
2 s. A.-M. ABDel-KhAliK e Al.
healy & palepu, 2001). his is e e ed o as he in o ma ional ole o inancial analys s. consequen ly, inan-
cial analys s’ in o ma ional and moni o ing oles can encou age long- e m in es men s and he eby mi i-
ga e manage ial myopia. hese wo oles can be ega ded as he bene icial in luence o inancial analys s
on manage ial beha io .
Finally, inancial analys s c ea e ex eme p essu e on managemen o achie e sho - e m ea nings a -
ge s and a ain analys s’ ea nings o ecas s, since missing analys s’ ea nings o ecas s leads o a signi i-
can decline in s ock p ices, a d op in managemen compensa ion, and a highe p obabili y o
managemen u no e (g aham e al., 2005). hence, managemen is incen i ized o o go iable long- e m
in es men s in o de o accomplish sho - e m goals (cla ke e al., 2015; he & ian, 2013; Michenaud,
2008). his is known as he p essu e ole o inancial analys s’ co e age. his ole can be iewed as inan-
cial analys s’ de imen al in luence on manage ial beha io .
e idence om p e ious s udies on he ela ion be ween analys co e age and manage ial myopia is
mixed. hus, his ela ion is no ye ully unde s ood and i s na u e is s ill an empi ical issue. in he way
o unde s anding his ela ion, we a gue ha manage ial myopia may be mode a ed by he a ailabili y
o in es men oppo uni ies. We hypo hesize ha he a ailabili y o good in es men oppo uni ies is
expec ed o mi iga e manage ial myopia. on he o he hand, i good in es men oppo uni ies a e in
sho supply, he manage will be emp ed o in es in sho - e m p opje s. his possibili y is no e alu-
a ed in p io esea ch and hus he cu en s udy could con ibu e o ex an li e a u e, especially as
e idence o igina es in an eme ging economy such as egyp .
Mos p io s udies in es iga e whe he analys co e age is ela ed o i ms’ in es men in de eloped
coun ies. gi en ha a coun y’s ins i u ional ac o s, such as legal and in o ma ion in as uc u e, could
in luence he e ec o inancial analys s on managemen beha io (chang e al., 2000; Degeo ge e al.,
2013; elbannan, 2013), he cu en s udy examines he ela ion be ween analys co e age and manage ial
myopia and he mode a ing e ec o in es men oppo uni ies on his ela ion in an eme ging economy,
namely egyp .
Addi ionally, his s udy add esses one implica ion o agency heo y by indica ing how he in e ac ion
be ween analys co e age and in es men oppo uni ies can imp o e he in o ma ion en i onmen
h ough educing in o ma ion asymme y and p o ide e ec i e moni o ing ac i i ies. hence, he de i-
men al impac o mo al haza d and ad e se selec ion p oblems on in es men decisions is dec eased.
ou indings indica e ha he e is a posi i e e ec o analys co e age on manage ial myopia, which
suppo s he p essu e ole o inancial analys s. Mo eo e , he indings sugges ha analys co e age
a ec s manage ial myopia only when he i m has good in es men oppo uni ies, which is consis en
wi h inancial analys s’ moni o ing ole.
he emainde o his pape is o ganized as ollows: sec ion 2 p esen s heo e ical backg ound. sec ion 3
p esen s empi ical li e a u e e iew and hypo heses de elopmen . sec ion 4 desc ibes he esea ch design,
a iables measu emen , and sample selec ion. in sec ion 5, empi ical esul s, discussion, and addi ional
analyses a e p esen ed. sec ion 6 p esen s summa y and conclusion. limi a ions and u u e esea ch ideas
a e laid down in he inal sec ion.
2.Theo e ical backg ound
in an ideal en i onmen ha is ee om ic ion, manage s will engage in p ojec s wi h posi i e ne
p esen alues (Modigliani & Mille , 1958). howe e , in he eal wo ld, li e a u e indica es ha i ms make
subop imal in es men decisions. he con lic o in e es s be ween manage s and sha eholde s and man-
age s endency o ac in hei own in e es s a he expense o s akeholde s’ in e es s (i.e. agency p ob-
lem), explain he exis ence o subop imal in es men decisions (chen e al., 2017; Jensen & Meckling,
1976; s ein, 2003). he imp o emen o i ms’ in o ma ion en i onmen and he e ec i e moni o ing
exe cised by ins i u ional in es o s, inancial analys s, and o he s akeholde s can lessen bo h mo al haz-
a d and ad e se selec ion p oblems induced by he sepa a ion o owne ship and con ol (chen e al.,
2017; Jensen & Meckling, 1976).
s ein (1989) sugges s ha manage s can beha e myopically e en in a pe ec ly e icien ma ke o
wo easons: manage s p ima y conce n wi h s ock p ices and he unobse abili y o manage ial ac ions
and manage s’ p i a e in o ma ion ad an age o e sha eholde s. Acco ding o s ein (1989) model,
cogen Business & MAnAgeMen 3
sha eholde s make p edic ions o u u e ea nings based on hei cu en ea nings. hence, manage s a e
incen i ized o manipula e signals o sha eholde s by exagge a ing cu en ea nings o inc ease an ici-
pa ed u u e ea nings. he s ock ma ke , on he o he hand, makes i s p ojec ions based on an icipa ing
a speci ic le el o ea nings g ow h. Fu he , Bebchuk and s ole (1993) a gue ha sho - e m objec i es,
along wi h impe ec in o ma ion, may cause unde in es men o o e in es men in long- e m p ojec s
based on he obse abili y o he le el o in es men and i s p oduc i i y. hey p o ide e idence ha
unde in es men can occu when in es o s a e no able o obse e he le el o in es men unde aken,
whe eas o e in es men can occu when in es o s a e able o pe cei e he le el o in es men bu no
i s p oduc i i y.
on he one hand, inancial analys s ac as e ec i e moni o s o manage s’ beha io because hey ha e
dis inc i e cha ac e is ics (Jensen & Meckling, 1976). hence, analys s can mi iga e he mo al haza d p ob-
lem and encou age long- e m in es men ha maximizes sha eholde s’ weal h and i m alue. on he
o he hand, he capi al ma ke punishes companies ha do no mee o bea analys s’ o ecas s (Mizik,
2010). he e o e, manage s ha e incen i es o beha e myopically and o go good in es men
oppo uni ies.
3. Li e a u e e iew and hypo heses de elopmen
3.1. Analys co e age and manage ial myopia
he in luence o analys co e age on co po a e in es men and inancing decisions has been in es iga ed
in p io s udies. Doukas e al. (2008) ind ha i ms inc ease hei in es men as a esul o inc eased
analys co e age. De ien and Kecskés (2013) indica e ha a decline in analys co e age dec eases i m
in es men and inancing ac i i ies. Fu he mo e, his esul is mo e signi ican o smalle i ms and
hose wi h highe inancial cons ain s. hese indings a e consis en wi h he idea ha a ise in in o ma-
ion asymme y esul ing om a educ ion in analys co e age can inc ease he cos o capi al, which in
u n causes a educ ion in long- e m in es men . in o he wo ds, managemen o i ms wi h less analys
co e age ends o become myopic.
his s eam o li e a u e documen s how ins i u ional cha ac e is ics o a coun y a ec he ole o
analys co e age as ex e nal moni o s. sun (2009) inds ha i ms end o manage ea nings less due o
inc easing analys co e age. in addi ion, his ela ion is mo e signi ican o coun ies wi h weak in es o
p o ec ion. Degeo ge e al. (2013) ind ha he inancial de elopmen o a coun y a ec s inancial ana-
lys s’ moni o ing ole using da a om 21 coun ies.
ega ding inancial analys s’ p essu e ole, a numbe o s udies indica e ha inancial analys s, by
de e mining sho - e m ea nings a ge s o accomplish, impose undue p essu e on i ms’ manage s.
Michenaud (2008) inds ha i ms dec ease long- e m in es men when analys s p essu e o inc ease
ea nings pe sha e is high. Also, he decline in i ms’ in es men inc eases manage s’ abili y o achie e
analys s’ ea nings a ge s. he and ian (2013) show ha manage s a e mo e likely o dec ease i m inno-
a ion because o inc easing analys co e age.
cla ke e al. (2015), on he o he hand, ind ha analys co e age hinde s inno a ion and he eby
exace ba es manage ial myopia in i ms ha a e low-quali y inno a o s, whe eas analys s encou age
inno a ion in i ms ha a e e icien inno a o s, implying ha analys s ha e a bene icial ole in alloca ing
capi al unds o p o i able long- e m in es men s by impai ing was e ul inno a ion. guo e al. (2019)
indica e ha i ms dec ease &D expendi u es as a esul o inc easing analys co e age. in he mean-
ime, analys co e age may enhance i ms’ in es men in acquisi ions and co po a e en u e capi al,
which sugges s ha he inancial analys s’ in o ma ion and p essu e oles di e h oughou he nume -
ous policies ha a i m in es s in.
in sum, inancial analys s communica e in o ma ion abou i ms’ long- e m in es men s o o he s ake-
holde s and enable hem o ealize he eal alue o such in es men s by dec easing he in o ma ion
asymme y be ween manage s and in es o s. Also, inancial analys s, by ac ing as ex e nal moni o s o
i ms’ manage s, assis manage s in alloca ing capi al unds o he p ope long- e m in es men .
consequen ly, analys co e age induces manage s o engage in long- e m in es men s and he eby
dec eases he possibili y o manage ial myopia.
4 s. A.-M. ABDel-KhAliK e Al.
An al e na i e iew sugges s ha inancial analys s exe cise undue p essu e on manage s o a ain
sho - e m goals. hus, manage s a e willing o dec ease long- e m in es men and as such exace ba e
manage ial myopia.
Acco ding o he p io s udies e iewed abo e, wo compe ing hypo heses a e o mula ed.
H1-a: he in o ma ion and moni o ing ole:
Analys s’ co e age mi iga es manage ial myopia.
H1-b: he p essu e ole:
Analys s’ co e age enhances manage ial myopia.
3.2. The mode a ing e ec o in es men oppo uni ies on he ela ion be ween analys
co e age and manage ial myopia
he p oposed mode a ing e ec o in es men oppo uni ies on manage ial myopia is a no el addi ion
o he ex an li e a u e. he a ionale o his p oposed mode a ing e ec is ha in an en i onmen , wi h
ich in es men oppo uni ies coupled wi h adequa e analys co e age, o going p o i able in es men
oppo uni ies g ows exceedingly di icul o he manage . As such in his en i onmen , myopia is di icul
o expec . in o he wo ds, inancial analys s, by se ing as e ec i e moni o s and educing in o ma ion
asymme y, encou age manage s o inc ease in es men s ha maximize i ms’ alue and he eby maxi-
mize sha eholde s’ weal h, gi en p o i able in es men oppo uni ies. consequen ly, he bene icial e ec
o analys co e age on manage ial myopia will be obse ed gi en he exis ence o in es men
oppo uni ies.
consequen ly, he nex hypo hesis is o mula ed:
H2: In es men oppo uni ies mode a e he ela ion be ween analys co e age and manage ial myopia.
4. Resea ch design
4.1. Model speci ica ion
he ollowing logis ics eg ession model is es ima ed in o de o examine he e ec o analys co e age
and he mode a ing e ec o in es men oppo uni ies on manage ial myopia:
MM COV INVOPP COV INVOPP SIZE ROA
i i i i i i
=++ + + +
ββ β β β β
01 2 3 4 5
*
ii i
i i i i
LEV
INST FCF INV Yea ind
+
+ + + +∑ +∑
−
β
β ββ β β
6
7 8 9 1 10 11
∆uu s y i i
+
ε
whe e MM is manage ial myopia; co is analys co e age; in opp is in es men oppo uni ies; siZe is
i m size; oA is e u n on asse s; le is le e age; ins is ins i u ional owne ship; FcF is ee cash low;
Δin is p io yea ’s change in he i m’s in es men . Ɛi is e o e m.
indus y and yea dummies a e included o cap u e he po en ial e ec s ela ed o he indus y and
he yea .
4.1.1. Measu emen o dependen a iable
Fi ms’ in es men in ixed asse s is used o cap u e manage ial myopia. in es men in ixed asse s educes
ea nings h ough inc easing dep ecia ion. i is also inanced by dec easing cash o inc easing deb .
hence, he educ ion in in es men in ixed asse s leads o mee ing sho - e m goals (edmans e al.,
2017; g aham e al., 2005; K a e al., 2018). Fu he mo e, se e al s udies sugges ha unde in es men
in ixed asse s is used as a p oxy o manage ial myopia. Fo ins ance, g aham e al. (2005) indica e ha
manage s pos pone ini ia ing new in es men s and delay he main enance o equipmen o ul ill
cogen Business & MAnAgeMen 5
sho - e m objec i es. K a e al. (2018) examine he manage ial myopia hypo hesis by in es iga ing how
epo ing equency in luences capi al in es men le els.
Manage ial myopia (MM) is measu ed as a dicho omous a iable ha equals one i he change in ne
ixed asse s scaled by o al asse s a he s a o he yea is less han o equal o ze o, and 0 o he wise.
4.1.2. Measu emen o independen a iable
Following (cla ke e al., 2015), analys co e age (co ) is measu ed as he na u al loga i hm o one plus
he numbe o analys s co e ing he i m.
4.1.3. Measu emen o mode a o a iable
in es men oppo uni ies (in opp) a e measu ed using obin’s Q, which equals he ma ke alue o
equi y plus o al deb a end o yea o e he book alue o asse s a he beginning o he yea .
4.1.4. Measu emen o con ol a iables
Fi s , ega ding i m size, la ge i ms ha e a be e in o ma ion en i onmen han smalle i ms. smalle
i ms, on he o he hand, may su e cash low cons ain s ha limi hei abili y o in es (Bushee, 1998).
he e o e, manage ial myopia is likely o be induced o smalle i ms. Fi m size (siZe) is measu ed by
na u al loga i hm o o al asse s. second, mo e p o i able i ms a e mo e likely o encou age long- e m
in es men and he eby mi iga e manage ial myopia (guo e al., 2019). p o i abili y ( oA) is measu ed by
he e u n on asse s.
hi d, Jensen (1986) a gues ha deb paymen s o ce manage s o payou cash, and he eby i ms
may ha e cash low sho ages ha lessen he likelihood o inc easing in es men s. Fi ms wi h highe
le e age a e epo ed o engage in myopic beha io (cheng e al., 2013; K a e al., 2018). We con ol
o le e age (le ), which is measu ed as he a io o o al deb scaled by o al asse s.
Fou h, ins i u ional in es o s ha e an impac on i ms’ in es men beha io in wo di e en ways. on
he one hand, ins i u ional in es o s who ha e a high po olio u no e and engage in momen um
ading s a egies can induce manage s o beha e myopically. on he o he hand, ins i u ional in es o s
may mi iga e manage ial myopia by p o iding a highe deg ee o moni o ing o manage ial beha io
(Bushee, 1998; Wahal & Mcconnell, 2000). hence, we con ol o ins i u ional in es o s (ins ), which is
measu ed as he a io o a i m’s sha es held by ins i u ional in es o s.
Fi h, i ms wi h high ee cash low a e mo e likely o inc ease i ms’ in es men (Jensen, 1986).
Addi ionally, i ms wi h subs an ially nega i e ee cash low ha e a g ea e need o aise capi al and hus
ha e incen i es o beha e myopically o inc ease ea nings and achie e sho - e m goals (Bushee, 1998).
We con ol o ee cash low (FcF), which is measu ed as cash low om ope a ions less capi al expen-
di u es scaled by o al asse s.
six h, we con ol o he p io yea ’s change in i m’s in es men (Δin ), which is measu ed as i m’s
in es men in yea -1 minus in yea -2 scaled by o al asse s. Acco ding o Bushee (1998), a educ ion in
i m’s in es men las yea inc eases he p obabili y o educing in es men in he cu en yea . con e sely,
i he i m cu in es men in a p eceding yea , i becomes cos lie o educe in es men in he cu en yea .
4.2. Sample selec ion and da a sou ces
he s udy’s popula ion comp ises all egyp ian companies lis ed on he egyp ian s ock exchange. Banks
and inancial se ices i ms a e excluded due o hei unique inancial epo ing p ac ices. A sample o
100 non inancial, lis ed egyp ian i ms wi h 600 i m-yea obse a ions om he pe iod 2014–2019 is
selec ed o examine how analys co e age in luences manage ial myopia as well as in es iga e whe he
his e ec depends on he ex en o which in es men oppo uni ies exis . his pe iod is selec ed o
a oid ime pe iods wi nessing unusual e en s, including poli ical up ising in egyp p eceding he yea
2014 ha has had an unknown e ec on economic s abili y in addi ion o he pe iod ollowing 2019
which expe ienced he co iD-19 epidemic, which has had a eaching impac on he economy. he da a
a e collec ed om he egyp ian s ock exchange o icial websi e, companies’ websi es, and he Mubashe
6 s. A.-M. ABDel-KhAliK e Al.
websi e ha a e publicly a ailable online. he da a a e also ob ained om egyp o in o ma ion
Dissemina ion (egiD) in exchange o a cha ge.
5. Empi ical esul s
5.1. Desc ip i e s a is ics and co ela ion
able 1 p esen s desc ip i e s a is ics o he independen , mode a o , and con ol a iables ha a e used
in he s udy. in o de o elimina e he ou lie s e ec , all con inuous a iables included in he s udy a e
winso ized a he op 5% and he bo om 95% pe cen iles o hei dis ibu ion. he mean o analys
co e age (co ), as measu ed by he na u al loga i hm o one plus he numbe o analys s p o iding
co e age, equals 0.367, which implies ha abou one analys is co e ing he i m on a e age. he in es -
men oppo uni ies (in opp) ange om 0.538 o 3.005, and he mean equals 1.229. he mean o i m
size (siZe), as measu ed by he na u al loga i hm o o al asse s, is 20.596, which app oxima ely ma ches
a o al asse s size o egp 880 million, indica ing ha he s udy sample is p ima ily composed o
medium- o la ge-sized i ms. he le e age a io (le ) anges om 8% o 82%, and he mean is 43%,
which indica es ha app oxima ely 43% o he o al asse s o sample i ms a e inanced by deb , sug-
ges ing ha sample i ms a e mode a ely le e aged. he ins i u ional owne ship (ins ) a ies om 0% o
94%, and he mean is 58.1%. he mean o p o i abili y ( oA) is equal o 6%. he ee cash low (FcF),
scaled by o al asse s a he beginning o yea , a ies om –0.161 o 0.239, wi h a mean o 0.024. he
mean o he p io yea ’s change in he i m’s in es men (Δin ) equals 0.003.
he pea son co ela ion coe icien s o all a iables in he s udy a e shown in able 2. Analys co e -
age, in es men oppo uni ies, i m size, e u n on asse s, p io ’ yea in es men , and he in e ac ion
a iable a e nega i ely co ela ed wi h manage ial myopia, which en a i ely imply ha i ms wi h highe
analys co e age, be e in es men oppo uni ies, highe p o i abili y, a la ge p e ious in es men in ne
ixed asse s, and a la ge size exhibi less manage ial myopia in e ms o cu ing in es men . Wi h he
excep ion o he co ela ion be ween he co e age (co ) and he in e ac ion e m (co *in opp), all
o he co ela ions be ween p edic o a iables ange om mode a e o low. hence, mul icollinea i y is
no a conce n.
Table 1. Desc ip i e s a is ics.
Va iables n Mean sD Minimum Maximum
COV 600 0.367 0.639 0 2.013
INVOPP 600 1.229 0.612 0.538 3.005
COV*INVOPP 600 0.515 0.989 0 3.466
SIZE 600 20.596 1.347 18.199 23.15
ROA 600 0.060 0.076 −0.068 0.228
LEV 600 0.439 0.219 0.084 0.818
INST 600 0.581 0.286 0.000 0.939
FCF 600 0.024 0.099 −0.161 0.239
ΔINV 600 0.003 0.027 −0.038 0.080
No es: his able shows he sample’s desc ip i e s a is ics. he s udy sample consis s o 600 i m-yea obse a ions and spans he yea s 2014
o 2019.
Table 2. Pea son co ela ion ma ix.
Va iable MM CoV inVoPP CoV*inVoPP siZe Roa LeV ins FCF ΔinV
MM 1
CoV −0.166*** 1
inVoPP −0.081** 0.235*** 1
CoV*inVoPP −0.202*** 0.910*** 0.457*** 1
siZe −0.107*** 0.565*** 0.172*** 0.520*** 1
Roa −0.156*** 0.205*** 0.507*** 0.333*** 0.115*** 1
LeV 0.020 0.015 0.051 0.009 0.227*** −0.204*** 1
ins 0.025 0.060 0.204*** 0.077* 0.309*** 0.100** 0.251*** 1
FCF 0.021 0.090** 0.278*** 0.169*** 0.089** 0.545*** −0.171*** 0.081** 1
ΔinV −0.161*** 0.105** −0.026 0.102** 0.017 0.114*** 0.003 0.017 −0.009 1
No es: his able shows Pea son co ela ion coe icien s o analys co e age, manage ial myopia, in es men oppo uni ies, and o he con ol
a iables. *, **, *** signi ican ela ionship a he 10%, 5%, and 1% h esholds.
cogen Business & MAnAgeMen 7
5.2. Reg ession esul s
he maximum likelihood (Ml) es ima ion me hod is used o es ima e he logis ics eg ession model.
guja a i (2003) indica es ha ha ing a dummy a iable o each ca ego y o g oup leads o pe ec col-
linea i y. hence, when he logis ics eg ession model is un, he s A A omi s one indus y sec o and one
yea because o collinea i y. Also, he s A A excludes 18 obse a ions, and as a esul , he numbe o
obse a ions educes o 582. o o e come he po en ial he e oscedas ici y and au oco ela ion p oblems,
obus s anda d e o s a e applied (g eene, 2003). Also, he a iance in la ion ac o ( iF) is calcula ed o
ensu e he absence o mul icollinea i y.
As shown in able 3, he iF o all explana o y a iables in he s udy model is less han 10. hence,
he e is no signi ican mul icollinea i y p oblem. able 3 also shows he logis ics eg ession esul s ega d-
ing he e ec o analys co e age on manage ial myopia as well as he e ec o in es men oppo uni-
ies as a mode a o a iable. i is impo an o assess he obus ness o he s udy model be o e in e p e ing
he coe icien s o he s udy a iables. he p obabili y o chi2 = 0.0000 is less han he le el o signi i-
cance o 5%. hence, he eg ession model is s a is ically signi ican .
he ecei e ope a ing cha ac e is ic ( oc) cu e o he s udy model is shown in Figu e 1. hosme
e al. (2013) indica e ha a la ge a ea unde he oc cu e imp o es he model’s classi ica ion
Table 3. he e ec o analys co e age and he mode a ing e ec o in es men oppo uni ies on manage ial myopia.
Dependen a iable: MM
Va iables Coe icien z-s a is ic ViF
COV 0.8273* 1.94 8.95
INVOPP 0.3221 1.58 2.17
COV*INVOPP −0.8539*** −3.04 9.87
SIZE −0.1576 −1.55 2.25
ROA −3.8868** −2.15 2.13
LEV 0.0114 0.02 1.55
INST 0.7246** 2.04 1.38
FCF 2.5722** 2.18 1.50
ΔINV −7.4624** −2.19 1.07
Cons an 3.4743 1.50
Indus y dummy included
Yea dummy included
Obse a ions 582
Wald chi2 (25) 65.53
P ob > chi20.0000
Pseudo R20.0953
Classi ica ion 68.38%
A ea unde Roc cu e 0.6967
No es: his able p esen s logis ics eg ession esul s o he e ec o analys co e age, he in e ac ion o in es men oppo uni ies wi h analys
co e age, and he con ol a iables on manage ial myopia as a dummy a iable ha equals one i he changes in ne ixed asse s scaled by
o al asse s a he s a o he yea a e less han o equals ze o, and 0 o he wise. *, **, *** ep esen signi icance le el a 10, 5, 1 % le el
espec i ely.
Figu e 1. he RoC cu e.
