TY  - JOUR
TT  - Effect of Managers’ Illusion of Control and Corporate Governance Structure on the Sensitivity of Investment Cash Flow
AU  - Hsu, Ai-Chi
AU  - Chen, Hsu-Sheng
PY  - 2017
DA  - September
JF  - International Journal of Economics and Financial Issues
JO  - IJEFI
PB  - İlhan ÖZTÜRK
WT  - DergiPark
SN  - 2146-4138
SP  - 31
EP  - 35
VL  - 7
IS  - 3
KW  - illusion of control
KW  - non-operating income and expense
KW  - investment cash flow sensitivity
N2  - This study examines publicly listed Taiwanese companies to explore the effect of managers' illusion of control on the sensitivity of investment cash flow, as well as the adjustment effects of different corporate governance structures. We constructed various proxy variables and found that non-operating income and expense has a significant positive impact on future capital expenditure ratios. As the company's operating risk increases, managers are more willing to invest, showing managers’ confidence in their own expertise and their optimistic expectation to control future scenarios. The results related to corporate governance structures showed that co-governance and expert management governance mechanisms tend to mitigate managers’ illusion of control, weakening the investment cash flow sensitivity. Government control models did not show a significant impact and there was no significant adjustment effect on the investment cash flow sensitivity. Firms with single-family governance may have agency problems and strengthen the investment cash flow sensitivity.
UR  - https://dergipark.org.tr/tr/pub/ijefi/issue//354188
L1  - https://dergipark.org.tr/tr/download/article-file/365302
ER  -