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VOL. 9, ISSUE 4 (2023)
The importance of behavioral biases in entrepreneurs' working capital management: A theoretical exploration
Authors
Amar Jyoti Borah, Amalesh Bhowal
Abstract
This theoretical paper examines the significance of behavioral biases
in influencing entrepreneurs' working capital management decisions. Working
capital management plays a crucial role in the short-term financial health and
operational efficiency of businesses. However, the impact of behavioral biases,
such as overconfidence, loss aversion, and anchoring, on entrepreneurs'
decision-making regarding working capital remains understudied. Through a
comprehensive review of behavioral finance literature and working capital
management theories, this paper explores how behavioral biases may affect
entrepreneurs' perceptions of working capital needs and their implications for
business performance. The theoretical analysis provides insights into the
potential consequences of behavioral biases on working capital efficiency,
profitability, and overall business sustainability. Furthermore, the paper
discusses strategies and interventions that can help entrepreneurs mitigate the
impact of behavioral biases on their working capital management decisions.
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Pages:26-30
How to cite this article:
Amar Jyoti Borah, Amalesh Bhowal "The importance of behavioral biases in entrepreneurs' working capital management: A theoretical exploration". International Journal of Commerce and Management Research, Vol 9, Issue 4, 2023, Pages 26-30
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