Overconfidence Of Senior Execu-Tive,equity Balance And Diversification

As a primary industry,agriculture is an important prerequisite for promoting the development of our society.As of 2019,the "Central No.1 Document" has been concerned about the "three rural issues" for 16 consecutive years,and first proposed in 2018 that the rural economy should be diversified.Agricultural listed companies should strive to promote the development of small and medium-sized enterprises.At present,many enterprises ignore the main business in the development process,paying too much attention to the real estate and financial industries,resulting in insufficient development momentum of China’s agriculture.Diversification is very important for agribusiness,but how to grasp the degree of diversification has become a problem that executives should consider in the decision-making process.According to relevant theories,the irrational errors generated by the manager’s overconfidence may affect the investment behavior of the company,leading to excessive levels of corporate diversification.To ensure the healthy development of the company,it is very important to establish a good corporate shareholding structure.There is no literature research on whether the higher equity balance can inhibit the influence of executive overconfidence on diversity.Therefore,based on behavioral finance,this paper explores the relationship between executive overconfidence and agricultural diversification,and then further studies whether equity checks and balances will affect the relationship between executive overconfidence and corporate diversification.Firstly,the relevant research is collated and reviewed,and two research hypotheses are derived based on the research results and related theories.Then,with the 2008-2017 A-share agricultural listed company as the initial research object,the two methods are used to measure the overconfidence of executives.Finally,the empirical analysis is used to verify the hypothesis of this paper and obtain the following conclusions:(1)Overconfident executives are more likely to make radical expansionary investments;(2)In companies with higher equity checks and balances,overconfidence is diversified The positive impact of the chemical system is weakened;(3)Among the agricultural listed companies,the higher the financial situation,the higher the diversified management level.In view of the research conclusions,the following suggestions are proposed for reference:(1)Enterprises should establish scientific investment decision-making and evaluation mechanisms;(2)Executives should strengthen the suppression and management of their own self-confidence behaviors;(3)Enterprises should improve The company’s equity balance mechanism forms a good principal-agent relationship between shareholders and managers.