Executive Overconfidence To Study The Impacts Of The Efficiency Of The Enterprise Investment

Investment behavior directly affect the company’s financing decision and dividend distribution, indirect influence the development of the macroeconomic situation. Excessive investment cause resource waste, increase the financial risk of the enterprise; Idle is likely to lead to inadequate investment of funds, hinder the company forward. In the listed companies in our country, investment spending with cash flow volatility, may accompany respectively when abundant cash flow or inadequate investment insufficient or excessive greatly harm the interests of shareholders and stakeholders. Has developed the classic financial investment theory, the general focus on principal-agent and asymmetric information to explain enterprise of underinvestment and overinvestment. However, a large number of psychological experiments have confirmed that is common managers overconfidence psychological bias. That the irrational characteristics that may affect corporate investment decision-making behavior, and makes based on the mainstream theory of the governance mechanism of losing efficacy. Based on Chinese special system background to managers overconfidence as the breakthrough point, on the principal-agent theory, the financial contract theory, behavioral finance theory and information asymmetry theory as the theoretical analysis basis, the managers overconfidence of Chinese listed companies based on an analysis of the current situation and investment, using the method of combining normative research and empirical research on 2008 and 2013, domestic listed companies in Shanghai and shenzhen two city related financial data of descriptive statistics, correlation analysis and regression analysis, and robustness analysis has carried on the empirical research, to explain executive overconfidence this irrational psychological the specific effects of the efficiency of the enterprise investment, mainly study the following conclusions:(1) executive overconfidence and significantly positively related to the efficiency of investment. Overconfidence of executives increase the efficiency of investment is much greater than the overconfidence executives is more apparent, therefore, investment excessive or insufficient both in the efficiency of investment of the two kinds of situations, overconfidence executives more easily lead to excessive investment.(2) research has shown that overconfidence executives showed a higher degree of investment cash flow sensitivity,When the internal cash flow, executive overconfidence can cause excessive investment, when insufficient internal cash flow, will lead to inadequate investment. The causes of this phenomenon is: on the one hand, under the condition of abundant cash flow of the premise, have excessive faith in such irrational executives will overestimate the advantageous projects with a positive net present value, and underestimate the net present value is negative for investment projects; On the other hand, when the lack of cash flow, overconfidence executives will overestimate the external financing costs instead of good investment decisions, so the executive overconfidence will show higher investment- cash flow sensitivity.