Managers' Overconfidence And Enterprises' Innovation Investment

Innovation is the first driving force to leading development,the strategic support to improving social productivity and comprehensive national strength,and the important fulcrum to promoting industrial transformation and upgrading in China.Innovation input,as the early input of enterprise innovation activities,can reflect the innovation intention of enterprises to a certain extent.At present,most of the studies are mostly focusing on the internal and external factors,such as industrial policy,fiscal and taxation policy,monetary policy,economic fluctuation,ownership structure,managerial competence,incentive incentives,financing constraints and so on,based on the assumption that managers are rational people.Since the theory of finance came into the research perspective of scholars,more and more scholars began to study the impact of managers' irrational psychological state on enterprise decision-making behavior,but most are focusing on the research of managers' irrational state on investment and merger decision-making,and the impact on innovation is still insufficient.Based on the study of managers' overconfidence in innovation investment,this paper further explores how analysts' tracking and controlling shareholders' equity pledge affect the relationship between the two in China's capital market.Finally,it studies the strength of the relationship between the two in different types of enterprises.Based on the sample of A-share listed companies in Shanghai and Shenzhen,the panel data of 2011-2017 are selected from the sample companies.After sorting out the sample data and making multiple regression analysis,the results show that:(1)Overconfidence of managers can significantly improve the innovation investment of enterprises;(2)Analysts Tracking can significantly enhance the positive correlation between Managerial Overconfidence and enterprise innovation investment;(3)The positive correlation between Managerial Overconfidence and enterprise innovation investment is suppressed in companies with controlling shareholder equity pledge.Further differentiating the nature of enterprises,we find that in state-owned enterprisesand high-tech enterprises,the positive correlation between Managerial Overconfidence and enterprise innovation investment is more significant.This study is helpful to build a bridge between behavioral finance and enterprise innovation investment,expand the research on managers' overconfidence and enterprise innovation,and has strong theoretical significance.This study is helpful to improve the construction of corporate governance mechanism,provide value ideas for the selection and incentive of corporate managers,and provide guidance for the formulation and implementation of corporate innovation decision-making,which has strong practical significance.This study will further enrich the research on managers' overconfidence,and analyze managers' irrational behavior in a more rational perspective,so that the outside world can correctly deal with the impact of managers' overconfidence.