Management Overconfidence,Institutional Investor Heterogeneity And Corporate Investment Efficiency

The efficiency of enterprise investment is not only related to the development of enterprises,but also affects the the economic development and progress.As the leader of the company's business activities,management's investment behavior is easily affected by its psychological bias,which jeopardizes the development of the company and harms the interests of small and medium investors.As an important market participant,institutional investors have a professional team and they also have the right to participate in corporate govemance,which can restrain the inefficient investment caused by excessive self-confidence of management to a certain extent.Therefore,this paper seeks to improve the effectiveness of management decision-making and improve the investment efficiency of enterprises by exploring the factors of management over-confidence,institutional investor heterogeneity and enterprise investment efficiency to seek external property management mechanisms to maintain the stability of the capital market.This paper first summarizes the relevant literature and defines related concepts.Then,this paper proposes research hypotheses based on the management over-confidence theory,principal-agent theory,and information asymmetry theory.Next,this paper selects the Shanghai-Shenzhen A-share listed company as a research sample from 2010 to 2017,and uses the Biddle model to construct a regression model related to management overconfidence,institutional investor heterogeneity and enterprise investment efficiency and conduct empirical analysis.The final conclusion is that:(1)Management overconfidence can inhibit the investment efficiency of enterprises.(2)Institutional investors can increase the efficiency of corporate investment,and as well as the pressure-resisting institutional investors can promote enterprises to improve investment efficiency more than the pressure-sensitive institutional investors.(3)Institutional investors can curb inefficient investment caused by overconfidence in management,and as well as the pressure-inhibiting institutional investors in the state-owned enterprises have more obvious inhibition of non-efficiency investment caused by overconfidence of management than the pressure-sensitive institutional investors.The innovations of this paper are mainly reflected in the following:First,although there is a lot of research on the relationship between management overconfidence and corporate investment efficiency at home and abroad,from the perspective of institutional investors heterogeneity,the overconfidence of management leads to enterprises.The research on non-efficiency investment is relatively rare.In the process of exploring the relationship between management overconfidence and corporate investment efficiency,this paper further analyzes the role of institutional investors by analyzing the heterogeneity of institutional investors,which is beneficial to further study the mechanism of management's overconfidence and investment efficiency.And it is also beneficial to expand the influencing factors of corporate investment efficiency and enrich the empirical literature on management over-confidence on corporate investment efficiency.Secondly,different from the previous single perspective of studying the heterogeneity of institutional investors,this paper further studies the grouping of property rights based on the heterogeneity of institutional investors,making research more comprehensive and specific,and is beneficial to deeper levels to explore the governance role of institutional investors.