Thesis (M.Sc.) - Cairo University - Faculty of Commerce- Department of Business Administration

Purpose {u2013} There are two primary aims of this study: Frist, to investigate the extent to which managerial overconfidence affects investment inefficiency beyond its impact on using the internal source of finance or whether internal financing behaves as a fully intermediary. Second, to examine the emerging role of overconfidence in the context of decisions of debt maturity; review the evidence for the moderation effect that managerial overconfidence play between opportunities for growth and the usage of long-term debt and explore the moderating role of the managerial overconfidence from the level of cash flow perspective. Design/methodology/approach{u2013}The researcher has collected panel data of 282 firms from 5 different industries listed in 11 MENA countries for the period 2013{u2013}2019, represented by 1974 observations. The effect of managerial overconfidence on corporate financing decisions was tested by using by (Least Square Dummy Variable (LSDV)) for the part related to managerial overconfidence and internal financing and by the Generalized Method of Moments-Instrumental Variables (GMM-IV) for the part related to managerial overconfidence and long term debt. The study sample is divided into six groups (listed firms, cross-listed firms, the GCC firms, the Levant firms, the North Africa firm, and the Egyptian firms). Further to test hypothesis six, each group was divided into five subgroups based on cash flow level. Findings{u2013}The results demonstrate that overconfident CEOs could use internal financing to fund investment opportunities, which could alleviate the capital deficiency. However, it may also lead to exaggerated investments

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