Empirical Research On The Relationship Between Managers' Overconfidence And Enterprises' Financing Behavior

At present, in our country, the researches on behavioral financing are just on the primary stage. Based on the study of financial behavior and having discarded the hypothesis about rational managers that is advocated by the traditional theory about financing behavior, this paper attempts to analyze whether there exists relationship between managers' overconfidence and enterprises' financing structure, which possesses the academic and applied value.Having considered other elements that may impact financing structure, this paper have constructed research models and made empirical studies. The empirical results indicate that there is the obvious positive correlation between the managers' overconfidence and asset-liability ratio (especially short term asset-liability ratio), which proves that managers' overconfidence have profound impact on capital structure. Except that, the empirical study shows that there is no significant positive correlation between managers' overconfidence and the short term debts ratio, but there exists the obvious negative correlation between the managers' overconfidence and the long term ratio. So, this paper thinks that managers' overconfidence is also the important factor that influence the structure of debt deadlines.Based on the academic analysis and empirical research, this paper has made conclusions that managers' overconfidence is the significant element that impact the financing structure and will cause the enterprise to adopt radical behavior in incurring debts.