The effect of managers' overconfidence on cash holdings in companies listed on the Baghdad stock exchange: Mathematical analysis

Abstract

One of company managers' most important financial decisions is to choose an optimal level of cash holdings so that cash deficit costs are reduced, and profit resources are directed in line with the company's profitability goals. Managers' overconfidence is one of the most critical factors affecting the company's cash Holdings. The raison d'être of overconfidence is the peace that people get from it. In this regard, the current research aims to mathematically investigate the effect of managers' overconfidence on cash Holdings in companies listed on the Baghdad Stock Exchange in the ten years between 2012 and 2022. The statistical population of this research was the companies admitted to the Baghdad Stock Exchange, and 50 companies were selected using the systematic elimination method. A multivariate regression method and combined data were used to test the hypotheses. The research findings based on mathematical analysis showed that managers' overconfidence does not affect companies' cash Holdings on the Baghdad Stock Exchange.