Empirical Study Of Managerial Overconfidence And Corporate Performance

The research field of economics is usually based on the assumption of “rational people”.When behavioral finance was introduced,scholars began to explore from another angle,that is,irrational factors.For now,the academic research on irrational factors focuses on financial behavior decision-making,such as managers' decision-making behaviors such as investment,financing,and profit distribution.The current economic situation is unpredictable,which leads to a self-confident and daring manager to play an absolutely critical role in the subsequent development of the company.First of all,managers who are self-confident and dare to take risks and develop will not only play a key role in the company's own "active growth",but also have an important impact on the improvement of the company's own performance.However,when managers have self-confidence beyond a certain range,they will play a role in the negative impact on the company's important financial decision-making behavior and unpredictable decline in the performance of the company itself.Therefore,the negative and negative impact of managerial overconfidence on corporate performance is the research direction of this paper.Accounting conservatism not only limits the disciplinary means of managing opportunism,but also improves the quality of capital investment decisions.Accounting conservatism not only requires speeding up the release of “bad news” signals to stakeholders,but also enables stakeholders to urge managers to be aware of the existence of problems and take appropriate measures.It can be said that accounting conservatism helps to alleviate the negative impact of managers' overconfidence.Because by accelerating the understanding of bad news,accounting conservatism will bring the mid-term setbacks to the attention of other executives,board members and other stakeholders.These stakeholders are more likely to adopt a fair view and respond to bad news in a timely manner,making it easier for overconfident managers to recognize problems early and take corrective action.Based on the perspective of behavioral finance,this paper takes 2012-2017 as the research span,takes the Shanghai and Shenzhen A-share listed companies as the research object,and uses empirical methods to explore the relationship between managerial overconfidence and corporate performance and to join accounting conservatism.The effect of a factor on the relationship between the two.Then,the data is divided according to the nature of the property rights of the enterprise,and the evidence is separately verified.In the end,the following conclusions are drawn: First,there is a significant negative correlation between managerial overconfidence and corporate performance,that is,managers with overconfidence are more likely to make active risk-taking and pioneering decision-making behaviors such as investment and expansion.Over-investment in the enterprise leads to a decline in corporate performance.In addition,in state-owned enterprises,managers' overconfidence has a negative impact on corporate performance than non-state-owned enterprises.Second,accounting conservatism helps mitigate the negative impact of managerial overconfidence.When managers have excessive self-confidence,a sound accounting policy can timely correct the performance degradation caused by financial behavior decision errors caused by managers' psychological deviations.In addition,compared with non-state-owned enterprises,the degree of accounting conservatism in state-owned enterprises has a weaker inhibitory effect on the relationship between managers' overconfidence and corporate performance.