Managerial Overconfidence,Investor Sentiment And Debt Capital Financing Decision-making Of Listed Companies

The decision-making of capital structure is an important decision for companies,and nowadays more and more scholars begin to study antecedent factors of capital structure.With the rise of behavioral finance theory,the hypothesis of "not completely rational man" assumes that managers and investors are not entirely rational,which is closer to the reality of the capital markets.This paper explores the effect of irrational investors and managers on debt capital financing behavior of listed companies.from the perspective of behavioral finance theory.Although previous literatures have studied the effect of managerial overconfidence on capital structure,most of these studies only consider irrationality of managers,which is only one side of market main body.In fact,because of the imperfect of capital market in our country,there are still a lot of irrational investors.As the other side of market main body,these irrational investors'investment behavior may result in the deviation between stock price and intrinsic value,which can't adjust itself through capital market,thereby affecting companies' financing decisions.Therefore,from the theory of emotional contagion,this paper introduces investor sentiment to the relationship between managerial overconfidence and debt capital financing,based on previous studies about the effect of managerial overconfidence on debt capital financing.This paper studies the joint effect of investor sentiment and managerial overconfidence on debt capital financing decision-making of listed companies and its inner mechanism.Taking listed companies of china Shanghai and Shenzhen A shares in 2005-2013 years as the research sample,this paper uses SPSS 17.0 statistics software to analysis managerial overconfident,investors sentiment and company debt capital financing decision-making.In the model analysis process,through controlling other antecedent factors of debt capital financing,we summary regression results,then draw the following research conclusions:(I)Compared to general managers,overconfident managers tend to debt capital financing,and select high lever rate of capital structure,which means that managerial overconfidence is positively related to debt asset ratio;overconfident managers tend to long-term debt financing.(2)Managerial overconfidence is effected by investor sentiment.when investors sentiment is high,the positive correlation coefficient between managerial overconfidence and debt asset ratio increases,but significance decreases;the positive correlation coefficient between managerial overconfidence and the proportion of long-term debt financing increases.(3)When investor sentiment is down,the positive correlation coefficient between managerial overconfidence and debt asset ratio decreases;the positive correlation coefficient between managerial overconfidence and the proportion of long-term debt financing decreases.Through these studies,this paper further enriches the theory of capital structure,broadens the research perspectives of irrational managers and investors,and provides direction for further research.