<![CDATA[The research aims: This study examines the impact of the framing effect and clawback provision on divestment decision-making. The research focuses on the divestment decision-making process, which is influenced by the behavior of managers/directors as decision-makers. Prospect theory is the primary theoretical basis for understanding how managers respond to information related to profits and losses. The framing effect refers to how the presentation of information (positive or negative) affects risk-taking tendencies. At the same time, the clawback provision governs the return of managers' bonuses in the event of a decision-making error. Design/Methodology/Approach: This study uses an experimental approach with a 2x2 factorial design between subjects to examine the interaction between the framing effect and clawback provision in affecting divestment decision-making. Research findings: Results show that framing significantly influences divestment decisions; positive frames encourage risk-averse behavior, while negative frames increase risk-seeking behavior. Although the clawback provision does not have a significant effect directly, its interaction with the framing effect shows a significant effect. It generates novel effects beyond those described in the current literature. In positive frames, clawbacks encourage riskier decisions, while in negative frames, clawbacks restrain risky decisions. Theoretical Contribution/ Originality: This research is expected to open further discussion about the influence of psychological and behavioral factors in strategic decision-making, which is still rarely discussed in research in the field of management accounting. Practitioner/Policy implication: This research can significantly contribute to the academic literature regarding how to present useful management accounting information for decision-making. Research Limitations/Implications: This research focuses on discussing the framing effect based on the perspective of Prospect Theory by taking one form of framing effect, namely Risky-Choice Framing. Future research can further examine the influence of framing effects in divestment decision-making from the perspective of other theories and take other forms of framing effects, such as attribute framing or goal framing. Keywords: Decision making, Divestment, Framing effect, Clawback, Experiment]]>
Copyrights © 2026
