The Impact of Managerial Myopia on Corporate Financial Asset Allocation : Evidence from Md&A Textual Analysis

Drawing on the upper echelons and time orientation theories, we examined the influence of managers’ temporal disposition on corporate financial asset allocation. We used textual analysis to measure managerial myopia, and panel data analysis shows that management myopia will increase the allocation of financial assets. The results maintain robustness after the PSM, endogenous control, and other tests. This study verifies the moderating effect of corporate governance, proving that the positive causal relationship is more pronounced in firms with high managerial power and low analyst following. The mechanism test shows that managerial myopia affects financial asset allocation by adopting more conservative strategies. Furthermore, by increasing the allocation of financial assets, managerial myopia increases short-term profits and helps firms turn losses into profits but reduces innovation performance. This study emphasizes the importance of managers’ time perspective, helps explain the reasons for financialization, and offers meaningful implications for research on managerial behavior