The Impact of Behavioral Finance on the Financial Performance of an Enterprise
The Impact of Behavioral Finance on the Financial Performance of an Enterprise

Author(s): Peter Krištofík, Michaela Novotná
Subject(s): Business Economy / Management, Accounting - Business Administration, Socio-Economic Research
Published by: Masarykova univerzita nakladatelství
Keywords: behavioral economics; behavioral finance; deviations from rationality; regression models; financial performance of enterprises;
Summary/Abstract: Behavioral finance is an increasingly accepted approach to explaining human behavior in the market. Traditional financial theories treat financial markets and their participants as rational subjects. This paper focuses on behavioral finance and its impact on Slovak medium and large enterprises. It points to different perceptions of rationality in classical economics and behavioral economics. The aim is to create a linear regression model and to investigate the impact of deviations from the rationality on the company's financial performance, measured through ROA and ROE. The paper employs a primary data source: a questionnaire survey, completed by 33 corporate managers. It tests six linear regression models. These show that deviations from rationality, and age affect the financial performance of enterprises.

• Details
• Contents