Behavioral Corporate Finance: A Survey

ArXiv ID: ssrn-612064 “View on arXiv”

Authors: Unknown

Abstract

Research in behavioral corporate finance takes two distinct approaches. The first emphasizes that investors are less than fully rational. It views managerial fi

Keywords: behavioral finance, corporate finance, irrational investors, managerial decision-making, agency theory, Corporate Equity

Complexity vs Empirical Score

• Math Complexity: 3.0/10
• Empirical Rigor: 4.0/10
• Quadrant: Philosophers
• Why: The paper is a theoretical survey of behavioral corporate finance, discussing models of investor and manager irrationality with conceptual frameworks rather than dense mathematical derivations, and while it references empirical challenges and evidence, it does not present new backtests or implementation-heavy data analysis.

  flowchart TD
    A["Research Goal:<br/>Understand biases in corporate finance"] --> B["Data/Inputs:<br/>Capital structure, equity issuance,<br/>compensation data"]
    B --> C["Methodology Step 1:<br/>Investor Irrationality Approach"]
    B --> D["Methodology Step 2:<br/>Managerial Bias Approach"]
    C --> E{"Computational Process:<br/>Analyze market mispricing<br/>and timing effects"}
    D --> E
    E --> F["Key Findings/Outcomes:<br/>Market timing & biased<br/>corporate decisions"]