Manager Overconfidence,External Governance And Corporate Performance

At the end of the 20 th century,scholars began to introduce cognitive psychology,behavioral science and other concepts into the research field of corporate finance.The traditional financial theory rationality hypothesis was subverted,derived from behavioral finance theory,which believed the manager's irrational behavior would affect corporate performance.Most of the existing researches on the relationship between manager overconfidence and corporate performance are mainly through the intermediary of investment behavior,financing behavior and mergers and acquisitions.When introducing corporate governance research,most of them focus on internal corporate governance.This paper directly studies the relationship between manager overconfidence and corporate performance,and adds the external governance indicators such as debtor governance indicators,supplier governance indicators and employee governance indicators to analyze the relationship between manager overconfidence and corporate performance.Based on the analysis of related literatures at home and abroad,this paper takes the GEM listed companies as an example,adopts the data samples of 5 years from 2013 to 2017,and uses the combination of literature research and empirical research to propose the hypothesis and analyze relevant data,establish models and empirical tests,measure corporate performance with ROA,After studying the influence of manager overconfidence on corporate performance,the company's external governance mechanism was introduced to explore the role of creditor governance,supplier governance and employee governance in regulating the relationship between manager overconfidence and corporate performance.In order to ensure the stability and consistency of the empirical results,this paper selects the Tobin Q value as a substitute indicator for measuring enterprise performance to conduct a robustness test,and obtains the following conclusions:(1)manager overconfidence is significantly negatively correlated with business performance.(2)The asset-liability ratio is used to measure the debtor's governance level.The higher the debtor's governance level,the stronger the negative correlation between manager overconfidence and corporate performance.(3)Using the accounts payable turnover rate to measure the level of supplier governance,companies with higher turnover of accounts payable can suppress the negative correlation between manager overconfidence and corporate performance.(4)The employer's remuneration,which excludes executive compensation,accounts for the proportion of total assets,and companies with higher employee governance can suppress the negative correlation between manager overconfidence and business performance.Finally,based on the above conclusions,relevant recommendations were made to propose measures to improve corporate performance for listed companies on the GEM.These proposals include lowering debt levels and adopting more equity financing methods;speeding up account payable turnover and maintaining good relationships with suppliers;Improve the employee governance system and increase human capital investment.In order to provide certain reference for the GEM listed companies to improve corporate performance and improve external governance mechanisms.