Managerial Overconfidence,agency Costs And Enterprise Development

In recent years,the growth rate of the real economy has slowed down,and many manufacturing enterprises have faced the dilemma of transformation and upgrading.The efficiency growth space of manufacturing enterprises has been continuously compressed.The traditional economic growth model is no longer suitable for development at this stage,and many enterprises are facing the pressure of transformation and upgrading,how to achieve sustainable and efficient development of enterprises at this stage,the decision-making of managers is particularly critical.Since behavioral finance relaxed the assumption of market subjects as "rational economic man",scholars began to study the characteristics of enterprise managers,and explained the development of enterprises by demonstrating the existence of "limited rationality" in the market activities of enterprise managers.The illusion made up for the shortcomings of traditional economics' insufficient explanation of capital market fluctuations.Overconfidence,as an important factor that affects the behavior of market subjects,has been paid great attention by scholars,but previous research basically did not involve the impact of corporate managerial overconfidence psychology on the longterm development ability of enterprises.In this context,this article is based on behavioral finance and corporate finance theory,select the total factor productivity(TFP)as a measure of a company's long-term operating capacity,and use the data of China 's A-share manufacturing listed companies from 2010 to 2017 as a research sample to study the characteristics of corporate executives' overconfidence,and discussing the transmission mechanism of this influence from the principal-agent theory,and distinguishes the impact of managerial overconfidence on the long-term development ability of enterprises under different environmental factors.The study found that managerial overconfidence has a significant inhibitory effect on the enterprise's total factor productivity.After controlling endogeneity,the conclusion is still true.Further,the test of the mechanism of action shows that the overconfidence of managers significantly increases the agency cost of enterprises and ultimately damages the efficiency of enterprise development.At the same time,when distinguishing different environmental factors,it is found that compared with non-stateowned enterprises,the overconfidence of managers in state-owned enterprises has a more obvious inhibitory effect on the total factor productivity of the enterprise;the competition in the industry where the company is located is less,and the overconfidence of managers has a greater negative impact on the development of the company;the smaller the financing constraints,the more relaxed the constraints from the capital environment,the easier it is for managers to make irrational decisions and damage corporate value.The results of the article's research show that in manufacturing companies,managerial overconfidence can bring short-term expansion to the company,but in the long run,it is not conducive to the company's ability to innovate and improve the company's management efficiency,which has a negative effect on the transformation and upgrading of the company.This study provides micro-level executive level evidence for the development of manufacturing enterprises,and has certain reference significance for understanding the heterogeneous behavior of enterprise development and guiding China's manufacturing industry to "prosper from industry to finance" and "to get rid of virtuality to reality".