The Impact Of Investor Sentiment And Managerial Over Confidence On The Capital Structure Of The Listing Corporation

Capital structure effects on the development of the company’s significant, it determines the company’s financing costs, the impact of the company’s investment income, it has been a hot topic in academia. Domestic and foreign scholars on the company’s capital structure MM theory gradually from the initial development to balance theory, the major theory pecking order theory, market timing theory, however, these theories are always built on some of the same assumptions, for example, capital the market is efficient, the company’s manager or investor capital market is rational.However in recent years, based on the market of non-effectiveness, and other non-rational investors and managers based on the assumption that the gradual rise of behavioral finance and develop, which attracted the attention of domestic and foreign scholars. So they have to try some of the theory of behavioral finance research into within the framework of the company’s capital structure, which is more of the company’s capital structure is to study the relationship between investor sentiment and managerial overconfidence and, while the results obtained Most have confirmed or managerial overconfidence investor sentiment will affect the company’s capital structure.This article will draw scholars’ research methods and findings were analyzed investor sentiment, managerial overconfidence effect on the company’s capital structure and to investigate whether managers in different situations overconfidence, investor sentiment on the company’s capital structure whether the impact is different. Theoretical significance of this study is that it confirms the managerial overconfidence and capital structure of the relationship, and used to study the capital structure of the company as investor sentiment theory provides a new perspective; the real significance of the study is that it not only helps Listed Companies face up to the existence of investor sentiment, the right time to take advantage of investor sentiment appears to select the appropriate way of financing a rational capital structure, but also help the company improve governance mechanism for managers to minimize the formation of the company managerial overconfidence the negative impact of the ideal capital structure. In addition, this study for market regulators overconfidence metrics based on investor sentiment and managers to develop targeted and the effectiveness of regulatory policy provides a guideline.The main contents of the article can be summarized as the following four parts:The first part refers to the first chapter of this paper introduces the research background and significance, research content and methods set forth herein, and come with insufficient research innovations.The second part is the theoretical analysis and research hypothesis. This section refers to the second chapter, this chapter are proposed three pathway investor sentiment affecting the company’s capital structure and managerial overconfidence three ideas affect the company’s capital structure, and analyzes the managerial overconfidence whether or not under different circumstances investor sentiment on the company’s capital structure affect the situation. It should be noted that each article in the final part of the theoretical analysis are proposed with the corresponding research hypotheses.The third part is empirical research. This section includes the fourth and fifth chapters, Chapter IV briefly explain the source of the data, a specific definition of all variables and metrics, and set the investor sentiment, managerial overconfidence affect the company’s capital structure model. Chapter V data and regression testing process of each model and the regression analysis of the results. Then in order to verify the third hypothesis theoretical analysis, this paper is divided into two groups according to whether or not the data manager overconfidence, comparative study in two sets of data, the relationship between investor sentiment and the company’s capital structure whether there are differences.The fourth part is the sixth chapter of this paper, draw conclusions and make recommendations accordingly. This article concluded as follows:First, investor sentiment will affect the company’s capital structure, and asset-liability ratio negatively correlated optimistic investor sentiment will reduce the company’s debt ratio, while the pessimistic investor sentiment will improve the company’s asset-liability ratio; the second is the company’s managerial overconfidence will affect the company’s capital structure, overconfident managers willing to take on higher levels of debt debt financing to improve the company’s gearing ratio; the third is the company’s managers are non overconfidence state, investor sentiment for a greater role of the capital structure. For the above conclusion, at the end of the article put forward some suggestions.The innovation of this paper is while investor sentiment combined with managerial overconfidence for research into the company’s capital structure, which provides a new perspective for the study of the company’s capital structure.