Title: Behavioural corporate finance: existing research and future directions

Authors: Richard Fairchild

Addresses: School of Management, University of Bath, Claverton Down, Bath, BA2 7AY, UK

Abstract: Behavioural corporate finance (BCF) examines the effects of managerial and investor psychological biases on a firm|s corporate finance decisions (such as investment appraisal and capital structure). In contrast to the well-developed research in behavioural finance (which examines the effects of investors| biases on the behaviour of the financial markets), the emerging research in BCF is relatively young. In this paper, we review the existing research to date in BCF and suggest areas for future development.

Keywords: behavioural corporate finance; managerial biases; overconfidence; financing decisions; investment appraisal; capital structure; psychological biases.

DOI: 10.1504/IJBAF.2010.032843

International Journal of Behavioural Accounting and Finance, 2010 Vol.1 No.4, pp.277 - 293

Published online: 25 Apr 2010 *

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