Managers Overconfidence Investment And Financing Decisions Affect The Empirical Study Of Listed Companies

In this dissertation, the influence of managerial overconfidence on a company's financing and investment policies have been discussed. Viewing from the aspect of behavioral corporate finance and the angle of overconfident managers, together with traditional corporate financial theory, the role which managerial overconfidence plays in corporate financial decisions has been tested.By empirical analysis of Shanghai and Shenzhen stock markets from Year 2004 to Year 2006, in this dissertation, three main results are found by the method of WLS as follows:First, overconfidence of a CEO would increase debt ratio, and overconfidence of a Board Chairman would reduce it are tested. As a whole, managerial overconfidence has a positve relationship to debt ratio. Second, both of a CEO's overconfidence and a Board Chairman's would result in an inclination of extending debt maturity. Third, overconfidence of a CEO would reduce the increasing rate of investment, while overconfidence of a Board Chairman would increase it. After sorting investment ratio, the conclusion that managerial overconfidence is negatively related to investment ratio has been made by Logit Model.And then, factors which effect managerial overconfidence has been tested by Logit Model and GMM. The endogenesis and cross-infection of managerial overconfidence have been proved by an equation system.According to the above empirical results, combined with kinds of descriptive statistics, moderate overconfidence is good for improving a corporate's performance. However theoretically, excessive overconfidence would harm a corporate's value. To take advantages of overconfidence in a moderate extend, in this paper five suggestions are put forward: 1. to establish a manager individual character index system, and to advise it one of the factors to appoint or dismiss a manager; 2. to advance the equity incentive system as quickly as possible; 3. to continue and deepen the state-owned property right reform and complete the reformation of stock seperation and realize the full circulation early; 4. to enhance the corporate government and the supervision in stock option motivation system; 5. to develop the long-term debt financial market.