The Relationship Between Managerial Overconfidence And Financial Structure

Enterprise financial problem is the social focus all the time, and the financial structure of the enterprise is also a research hotspot of scholars at home and abroad. However, the traditional financial theories are based on the assumption of rational economic man, but managers and investors are not entirely rational in the market. Behavioral finance believes that participants in the market are not completely rational in most cases due to the feelings, emotions and other factors. This paper, based on the perspective of behavioral finance and abandoned the assumption of rational economic. man of the traditional financial theories, researchs whether there is a certain causal relationship between Managerial Overconfidence and financial structure so as to enrich the research results "of the financial structure related fields, and to provide useful reference for the enterprise management practice.This paper, based on the existing research results of the Managerial Overconfidence Theory, discusses the relationship between Managerial Overconfidence and financial structure in theory. This paper argues that the Managerial Overconfidence has an effect on the financial structure, especially in the level of debt and the debt maturity structure.In order to further confirm this paper’s theory research. This paper selected the chinese listed companies in2008-2010as samples, considered other factors which may influent financial structure, built a research model, and confirmed that the managerial overconfidence has an effect on financial structure according to the correlation tests, multiple regression analysis and stability test data analysis results. Finally the following conclusions are drawn:First, Managerial Overconfidence and the level of debt is positively correlated, that is to say, overconfidence manager will select the high level of debt. Second, Managerial Overconfidence and short-term debt maturity structure is positively correlated, that is to say, the overconfidence managers tend to the shorter period of debt. Third, industry factors will influent the relationship between the management overconfidence and financing structure. Fourth, the relationship between the managers’ over-confidence and the level of debt or short term debt structure changes more weaken correlated because of shareholder structure reform. Fifth, enterprise high debt will make the correlation of managerical overconfidence and financial structure weaken. To sum up, this paper has further enriched the research on financial structure, expanded the theory of managerial overconfidence and the financial structure. With the Shanghai and Shenzhen A shares as sample datas and according to three respects analysis of the industry factor, non-tradable shares, debt level difference, this paper offered relevant policy proposal finally and had a certain theorical and practical significance.