Research On Managers' Overconfidence And Corporate Financial Flexibility

At the same time as the development of the entire enterprise,the cognitive level of the executives has penetrated into the various processes of the development of the enterprise,and is also one of the important factors for the company to display its external image.A large amount of redundant redundant information has also appeared in the management work,Senior leaders within the company can not do a rational analysis.With the emergence of high-level theories in the later period,many scholars changed the core of their development to the field of psychological behavior,and based on this,they studied in depth the various effects of executives' overconfidence on the actual development of enterprises.The overconfidence of senior corporate leaders is a mixed effect with rational and irrational components and a catalyst for corporate executive behavior.The financial flexibility acts as a redundant resource for the enterprise,and has been recognized by the enterprise while the level of economic development has gradually increased.The organization theory school believes that redundant financial resources can give enterprises freedom and authority to a certain extent,and urge companies to choose their own development path in a complex environment.In the context of the three-phase superposition,the marginal effects of various stimulus policies are also affected,and it is necessary to mitigate various operating risks by optimizing the allocation of resources.Various industries are facinggreater market pressures while developing.Under this environment,the overall mentality of executives determines the actual level of development of the enterprise.Therefore,research on the relationship between manager's overconfidence and corporate flexibility can be The operation and development of other enterprises provide a certain reference role.This paper first explores the impact of managerial overconfidence on the financial flexibility of an enterprise through literature research,theoretical research,and normative analysis.Based on the foregoing,a hypothesis is proposed,and in-depth research is conducted in three directions.Secondly,the data of China A-share listed companies from 2010 to 2018 was selected as the research sample.Then establish a correlation regression model,make full use of STATA software for descriptive statistical analysis,correlation analysis,multiple regression analysis,endogenous test and robustness test for empirical analysis.Finally,it is concluded that:(1)the reserve of financial flexibility of the enterprise is a strong backing for managers in making investment decisions,so the overconfidence of the manager will promote the internal financial flexibility of the enterprise to a certain extent;(2)the state-owned Enterprises have a leading role in China's economic market,and their financing channels will be broader.Compared with state-owned enterprises in China,the overconfidence of non-state-owned enterprise managers has a more significant impact on the overall financial flexibility of the enterprise;(3)Bank-enterprise affiliated companies are more willing to increase their level of financial flexibility to prevent unfunded turnover when they are in financial distress,rather than apply to the bank for bankruptcy and disrupt this relationship with banks.Among enterprises,enterprises with excessive self-confidence of senior managers attach more importance to the reserve of overall financial flexibility.(4)The manager's overconfidence behavior and the company's political connection have a substitute effect,so the manager's overconfidence in a company with a political connection has a more significant impact on financial flexibility than a company without a political connection.Combining the current empirical research of China's national conditions andmanagers' overconfidence and corporate financial flexibility,in order to enable managers of enterprises to better plan corporate activities and improve the level of corporate operations,this article proposes three policy recommendations from the perspective of enterprises and managers:(1)Chinese enterprises should improve their ability to resist risks and establish a sense of financial flexibility.Actively explore diversified funding channels to solve its own development problems.(2)Enterprises should pay close attention to the construction of financial flexible monitoring mechanism,and effectively ensure that various speculative effects can play a practical role and advantages.(3)Managers should reduce the possibility of excessive self-confidence by improving their self-learning ability.