Managerial Overconfidence And Enterprise Innovation Performance

Innovation is the basic functions of enterprises.It is an important source of access to core competencies and the driving force for the stable development of enterprises.Scholars have done a lot of research since the introduction of the innovation theory,They studied enterprise innovation mainly from the perspective of corporate governance,corporate identity and so on.But the previous studies are based on the hypothesis of rational economic man.Scholars have begun to pay attention to managerial overconfidence of the irrational psychological,since the behavioral finance theory was put forward.As a decision maker,managers will have an important role in corporate decision-making.And then the research on the impact of corporate decision from the perspective of manager's overconfidence has gradually become a research hotspot.A large number of documents confirmed the drawbacks arising from the managers of excessive self-confidence,for example,inefficient investment,inefficient mergers and acquisitions and so on.This paper researches on the impact of the managerial overconfidence based on a new perspective.Overconfident managers have the "entrepreneurial spirit" of adventure,risk,innovation and so on.So,they play an important role in the decision-making.Their psychological characteristics of overconfidence will undoubtedly have an important impact on corporate innovation activities.Therefore,it is very important to study the influence of managers' overconfidence on the innovation performance of enterprises.The existing literature researched the impact of managerial overconfidence on the innovation performance mostly from a single aspect.They ignored firm heterogeneity which determines the manager's decision-making environment.The decision made by the manager depends on the heterogeneity of the enterprise.Does the impact of managerial overconfidence on innovation performance be affected by the firm heterogeneity? This paper takes the A-share Chinese listed firms from 2011 to 2014 as a sample and is based on the theory of behavioral finance,innovation theory and heterogeneity theory.At the same time,this paper classifies firm heterogeneity into two categories according to the different factors of enterprise innovation decision.First,internal factors,namely the nature of thecorporate ownership,enterprise scale,corporate liabilities;Second,the external factors,namely the type of industry.It examines the impact of the internal factors on the relationship between managerial overconfidence and innovation performance under the different types of industries respectively.The empirical results show that:(1)Managerial overconfidence can significantly improve enterprise innovation performance.(2)Compared with non-high-tech enterprises,the positive correlation between managerial overconfidence and enterprise innovation performance in the high-tech enterprises is more significant.(3)Compared with non-state-owned enterprises,there is a more significantly positive correlation between managerial overconfidence and corporate innovation performance in state-owned enterprises.(4)Compared with large-scale enterprises,managerial overconfidence and corporate innovation performance is more significantly positive correlation in the small-scale enterprises.(5)Compared with the financial expansion enterprises,there is a more significantly positive correlation between managerial overconfidence and corporate innovation performance in non-financial expansion of enterprises.