| Since the pilot operation of margin trading and short selling in China began on March 31,2010,China's securities market has shifted from "unilateral trading" to "bilateral trading".At the beginning of margin pilot,only 90 securities participated in margin trading and short selling.Until November 2011,the pilot business turned into a regular business,the number of margin trading securities has reached to more than 900 in 2016.Margin trading has been developing rapidly.In July 2015,however,China's stock market fell sharply,which lead to a decrease of margin trading,and after three months,margin balance fell by nearly sixty percent.In order to prevent the irrational decrease of company's share price,the managers took measures to release companies' good news,and even some companies took measures to apply for the suspension to avoid the falling of share prices.At this moment,margin trading and short selling is pushed to the forefront,more and more academic studies focus on margin trading.As a mechanism of short selling,margin trading and short selling has attracted great attention.Judging from listed companies in China at present,the minority shareholders of company are basically dependent on the majority shareholders.With the introduction of margin trading in China,especially the rapidly maturing of short selling mechanism,the negative news about listed companies in the market can get shift transmission and reflection,which increases the cost of majority shareholders and managers to violate the interests of minority shareholders,So does the introduction of margin trading have effects on the managers of listed companies? Whether this effect can effectively function on corporate governance,which is a provocative topic in practice.The current research on margin trading and short selling basically focuses on the market level,such as the impact of margin trading and short selling on the market volatility and pricing efficiency.Few studies based on company level,and these studies are basing on the asymmetric information and principal-agent theory,and the premise that managers and investors are completely rational to study the effect of corporate governance in a direct way.However,the external governance effect of margin trading and short selling should also include the indirect effect by restraining the managers' irrational behavior.Modern decision-making psychology research finds that the economic man in real life is "not completely rational",the managers as the center in the companys' business decision-making process,its decision-making behavior will not only be affected by the external environment of the company,but also by their own subjective psychological factors.Behavioral finance theory introduces the assumption that the managers are irrational,and uses this behavior trait to explain the abnormal decision-making behavior of the company.In addition,a large number of psychological studies suggest that overconfidence is one of the most important psychological characteristics of human beings.The psychological trait of overconfidence is more important for the management of company,because there are many uncertainties in the process of operation and management of company.Under the uncertainty,the managers need to make judgments and decisions,which leads to overconfidence.In addition,in order to understand and control the company's business activities,the managers are prone to control illusion,which will further increase their confidence.Therefore,based on the perspective of behavioral finance,the research on the managers' irrational behavior can provide some theoretical references for decision-making practices.At present,research on managers' confidence mainly focuses on overconfidence,which is only a state of confidence and does not reflect the psychological trait of managers' confidence in depth.Therefore,based on the principal-agent theory,stakeholder theory,corporate governance theory,behavioral finance theory and the information asymmetry theory,this dissertation uses 2008-2017 non-financial listed companies in China,and from the three dimensions of investment efficiency,perks and corporate social responsibility behavior,this dissertation investigates the influence of margin trading and short selling and managers' confidence on corporate governance effect.Firstly,based on the perspective of continuous variables,this dissertation studies the influence of managers' confidence on corporate governance effect.Meanwhile,considering that the opposite of managers' overconfidence be low confidence,and the intermediate state should be moderate confidence,this dissertation divides managers' confidence into low confidence,moderate confidence and overconfidence for testing respectively.Secondly,this dissertation studies the indirect governance effect of margin trading and short selling,which is the influence of margin trading and short selling on the relationship between managers' confidence and corporate governance effect.Thirdly,this dissertation studies the direct governance effect of margin trading and short selling,which is the influence of margin trading and short selling on the investment efficiency,perks and corporate social responsibility.The dissertation provides empirical evidence for the majority of investors and other stakeholders to understand the managers' irrational behavior,and provides a theoretical basis for the implementation effect of margin trading and short selling system in China,and enriches and expands relevant research results from a deeper level.Firstly,this dissertation studies the impact of margin trading and short selling and managers' confidence on investment efficiency.The results show that managers' confidence can decrease corporate investment efficiency by promoting corporate overinvestment and underinvestment.The rasults find that low confident managers improve investment efficiency by decreasing the degree of excessive investment and investment insufficiency.However,overconfident managers reduce investment efficiency by rising excessive investment and investment insufficiency.Then the results suggest that the margin trading weakens the relationship between managers' confidence and investment efficiency by decreasing the impact of confidence on overinvestment.Then the dissertation uses difference-in-differences method to study the effect of margin trading on investment efficiency,and finds that after the introduction of margin trading system,compared with the control samples,companies in the treatment group improve investment efficiency by reducing the degree of overinvestment and underinvestment.These results suggest that margin trading plays a certain external governance effect.Secondly,this dissertation studies the impact of margin trading and short selling and managers' confidence on perks.The results show that the relationship between managers' confidence and perks is negative.Further tests show that the influence of managers' low confidence,moderate confidence and overconfidence on perks is not only different in the degree,but also different in the direction.On this basis,the results show that the relationship between managers' confidence and perks is U shaped.That is,when managers' confidence level is relatively low,the relationship between managers' confidence and perks is negative.However,when managers' confidence level is relatively high,the relationship between managers' confidence and perks is positive.Based on this,under the background of margin trading,the results find that the relationship between managers' confidence and perks is weakened.The dissertation applies difference-in-differences to study the effect of margin trading on perks,and finds that after the introduction of margin trading system,compared with the control samples,companies in the treatment group reduce the excess perks.These results suggest that margin trading plays a certain external governance effect.Finally,this dissertation studies the impact of margin trading and short selling and managers' confidence on corporate social responsibility,and finds that the relationship between managers' confidence and corporate social responsibility behavior is negative.Then dividing the sample into low confidence,moderate confidence and overconfidence three samples,and finds in low confidence sample and moderate confidence sample,the relationship between managers' confidence and corporate social responsibility is negative,and the influence in low confidence sample is stronger.However,in overconfidence sample,the relationship between managers' confidence and corporate social responsibility is positive.On this basis,the dissertation further finds that interval effect exists in the influence of managers' confidence on corporate social responsibility.Based on this,finds that margin trading and short selling weakens the relationship between managers' confidence and corporate social responsibility.The dissertation uses difference-in-differences method to study the effect of margin trading on corporate social responsibility,and finds that after the introduction of margin trading,compared with the control sample,enterprises in the treatment group reduce the level of corporate social responsibility.These results suggest that margin trading plays a certain external governance effect.The academic contributions of this dissertation are as follows.(1)This dissertation expands the research area of corporate governance under shareholder value theory to the broad sense of corporate governance under the stakeholder theory,and studies corporate governance from the perspective of behavioral finance,which provides a new perspective for the existing research on corporate governance effect;(2)The existing research about managers' confidence focuses on overconfidence and non-overconfidence,this dissertation is based on the perspective of continuous variable,and divides the managers' confidence into low confidence,moderate confidence and overconfidence,to characterizes the managers' confidence influence on corporate governance effect in a more comprehensively way,which expands the related research about confidence;(3)This dissertation not only focuses on corporate investment efficiency,perks and corporate social responsibility behavior to study the external governance effect of margin trading directly,but also studies the indirect effect of margin trading by influencing the relationship between managers' confidence and investment efficiency,perks as well as the corporate social responsibility behavior,which enriches the research about economic consequences of margin trading and short selling;(4)This dissertation finds that the negative impact of managers' confidence on investment efficiency is reflected in the fact that managers' confidence will not only promote the overinvestment of enterprises,but also aggravate the degree of underinvestment of enterprises.At the same time,interval effect was found between managers' confidence and perks as well as corporate social resposibility behavior.These findings strengthen the understanding of the psychological characteristics of managers' confidence.The research results of this dissertation serve as significant reference for listed companies,investors and regulatory agencies.(1)This dissertation lays certain basis for listed companies to establish and improve corporate decision-making mechanism;(2)This dissertation puts forward suggestions for investors on how to understand and inspect the irrational behaviors of managers;(3)This dissertation gives guidance for regulators to restrain and supervise managers' irrational behaviors;(4)This dissertation provides reference for government to constantly improve and promote the margin trading and short selling mechanism. |
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