Managerial Optimism in Financial Disclosure; Prospects for Operational Efficiency and Market Reaction

Document Type : Research Paper

Authors

Assistant Professor, Department of Accounting, Payame Noor University, Tehran, Iran.

Abstract

To create a fair and transparent capital market, companies must fully disclose all their financial and non-financial information. This leads to increased reliability, comparability of companies' financial performance, and proper understanding of the information. Also, behavioral characteristics and emotions of management play a key role in companies' decision-making and, as a result, operational efficiency, resource allocation, performance, and development of the company. Therefore, the main purpose of the present study is to investigate the effects of managerial optimism in management's interpretive report on operational efficiency and capital market reaction in companies. To measure operational efficiency, the criteria of sales productivity, return on assets, and growth opportunities were used; while the criteria of stock returns, systematic risk, and stock returns volatility were used to measure market reaction.. The test sample consisted of 149 companies listed on the Tehran Stock Exchange in a 10-year period from 2014 to 2023. The results of the hypothesis test showed that managerial optimism has a negative and significant effect on sales productivity, return on assets of companies, and systematic risk. Managerial optimism also has a positive and significant effect on growth opportunities and stock returns of companies. According to the results of the hypothesis test, it can be stated that managerial optimism has a significant effect on the operational efficiency of companies and on the market reaction of companies.

Keywords

Main Subjects

References

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Journal of Accounting Advances
Volume 18, Issue 1
September 2026

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History

  • Receive Date: 14 October 2025
  • Revise Date: 28 April 2026
  • Accept Date: 13 May 2026

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