Previous research in behavioral corporate finance has demonstrated that managerial optimism has an explanatory power and it can explain observed distortions in corporate decisions. What makes it special is its being a major source of investment cash flow sensitivity and it can affect the firm value since it causes overinvestment or overinvestment (
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.