A Listed Company Executives Overconfidence Influence On Dividend Distribution Decision Research

Due to China’s listed companies in decision-making executives prone to overconfidence in the psychological preferences, which makes executives likely to deviate from rational decision-making, and thus will affect the company. Excessive self-confidence by domestic and international impact of the dividend distribution policy literature, some empirical studies found a positive correlation between the results and some negative correlation, based on this theoretical analysis to the study through the overconfidence effect on the dividend distribution established the conditions under which decision-making, and through empirical research to test whether this relationship was established. Which regulate our behavior listed company’s dividend distribution policy, dividend distribution of listed companies to explore decision-making mechanism, improve the quality of listed companies, China’s securities market and thus protect the health, stability, sustainable development has a very important theoretical and practical significance.In this paper, through the study of relevant literature, sort relevant theory, and defined the definition of overconfidence. Second, the psychological bias and decision-making from a personal point of view of our environment, two executives of listed companies overconfidence psychological preferences are analyzed, and find suitable measure of China’s listed companies an alternative to variable executive overconfidence. After the dividend by building self-confidence and over-allocation decisions of theoretical models, obtained when the over-confident executives of listed companies to invest in the project if the observed market environment-is greater than the risk-reward factor in the company’s actual business risk faced by the market environment-benefits the mean coefficient when the level of dividend distribution negatively correlated with overconfidence; executive overconfidence observed when the investment returns of the market risk coefficient is less than the company’s actual operations of the environmental risks facing the market-average income coefficient, the dividend distribution positively correlated with the level of overconfidence.Theoretical model to test the correctness of the conclusions, this paper-year period2007-2009the number of shares of China’s listed company executives and dividend distribution policy of the relevant data for the study sample, build the overconfidence effect on the dividend distribution policy of the statistical models and empirical analysis. The empirical results show that when the executives of listed companies expected return is greater than the actual revenue, executives with excessive self-confidence among the listed company’s dividend distribution policy there was a significant negative correlation; when executives of listed companies is expected to return less than the actual income when executives of listed companies overconfidence dividend distribution policy there was a significant positive correlation. Empirical findings to support the conclusions of theoretical models.Finally, the theoretical analysis based on the recommendations accordingly.