ABSTRACT
This study aims to explore the role of top manager’s present bias as a main driver of corporate investment. For this purpose, we embed an experiment in a firm-level panel survey with a sample of top managers from 623 textile and garment firms in Vietnam. The experiment enables us to elicit present bias for each individual manager. We find that firms led by managers with a greater level of present bias are more likely to have a lower investment. There also exists evidence that the effect of managers’ present bias on corporate investment is stronger for SMEs than for large firms.
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Disclosure statement
No, potential conflict of interest was reported by the authors.
Notes
1 According to the law on enterprises of Vietnam, SMEs are defined to be those with total employees equal or less than 200 people, while those with employees of more than 200 people are large firms.
2 According to the State Bank of Vietnam, in 2018 average USD/VND = 23,050.