Political Connection,managerial Overconfidence And Corporate Performance

Enterprise performance is the important indicators of enterprise development situation, development ability; outlook for the future development of the enterprise has a far-reaching influence. In the current our country is not yet perfect, under the constitutional system of the creation of the business performance and improve often affected by many aspects. Among them, the relationship between enterprise strategy in the political impact on enterprise performance more deeply. In a country like China pay attention to “favor” of the country, enterprises through its political association improve business performance has become a universal means of strategy. Relative to state-owned enterprises, private enterprises under the influence of political association, however, through the political association to improve the performance of enterprises are still abounding. Because of the influence of political association, private enterprise managers tend to show their superiority manifests the overconfidence. Because of the political association can bring convenience to the enterprise, and thus lead to the enterprise managers in psychological deviation. In the current research on political association and the relationship between overconfidence and corporate performance, usually is the study of relations between the two more. Enterprise managers of political association could lead to managers and overconfidence, and then affect the investment decisions of the enterprise, impact on business performance; Managers overconfidence in the cause of also is not limited to its political relevance, may also be related to the thoughts and actions of its own. Whether political associated with overconfidence has a common influence on enterprise performance and function became the starting point of this study. To explore the relationship between the three, find out the factors influencing the business performance of listed companies is of great significance.Based on the rent-seeking theory, principal-agent theory, the modern housekeeper theory, enterprise performance theory and behavioral finance, overconfidence theory, using standard combined with empirical research methods, enterprise performance as the foothold, explore the listed private enterprises managers political association for managers overconfidence, the influence of enterprise performance, and executive overconfidence influence on enterprise performance, and political associations, overconfidence influence on enterprise performance together. The Taian, wind and other database collection, selected listed on the Shanghai and Shenzhen stock exchange between 2010 to 2013 private listed companies as the research object, the enterprise financial characteristics, equity, revenue, etc micro-level data for empirical analysis. The empirical results show that the private listed companies managers political association have positive correlation with managers overconfidence psychological; Political association have positive effects on corporate performance; Moderate overconfidence of the manager to the positive role of enterprise performance, serious overconfident managers has negative effect on corporate performance; Managers have experience of government role and the business performance decline, as a result of serious overconfidence psychology has certain constraints, and managers have the people’s congress, or on behalf of the Chinese people’s political consultative conference will aggravate the overconfidence psychology as a result of poor corporate performance. Political associated with overconfidence will work together in business performance.