Study On The Financing Behavior Of Risk-averse Managers Based On Behavioral Finance Theory

The behavioral finance has development in 1980s, it proposed a new perspective for the classic financial theory can not explain or inadequate market "vision". As the most potential research perspective of behavioral finance, Behavioral Corporate Finance emphasizes the effect of two irrational behavioral for corporate allocation of resources irrational investors and irrational managers. Relative to irrational investors, the studies on the irrational managers' decision-making impact on the company is lagging.Firstly, on the basis of summarizing and analyzing, this text systematic analysis the background and meaning of topic selection of the financing behavior which the risk-averse managers did in behavioral finance, a survey of financing theory and the foundation theory and theme of behavioral finance; and then,it introduces the principle of multiple linear regression, Logistic regression and independent-samples T test, previous studied on these methods verifies the feasibility.Finally, Based on managers are irrational in behavioral corporate finance, proposing a financing decision-making model under rational investors and risk-averse managers, using risk aversion index to measure managerial risk aversion under behavioral corporate finance paradigm. This paper employs DJ-China 88 index from 2000 to 2004, using multiple linear regression, Logistic regression and independent-samples T test, analyzing the financing behavior which the risk-averse managers did. The findings show, when controlling other variables, the risk-averse index has significant negative influence on debt financing decision. The stronger the degree of risk-averse of managers is the smaller the likelihood of debt financing is that means risk-averse managers prefer stock financing.