A Study On The Influence Of Media Sentiment On Executive Overconfidence

In recent years,with the deepening of scholars' attention to and research on behavioral finance,the research results of this discipline have gradually made people realize that the hypothesis of "rational man" proposed in traditional finance can not always be satisfied in real economic activities,and all stakeholders of a company may have irrational psychological characteristics.In particular,the management of the company is more likely to make subjective mistakes,resulting in these irrational psychological characteristics and then affect a lot of decisions of the company.Among these irrational traits,"overconfidence" is the one that receives the most attention in academia.It is an irrational attitude of being unrealistically optimistic about one's own abilities and future prospects and believing that one is impossible to do wrong.In terms of corporate governance,however,some existing research has focused more on the possible effects of management overconfidence.It is found that most of the economic consequences brought by such irrational psychological characteristics are negative,such as low investment efficiency,aggressive financing,blind expansion and other phenomena.Therefore,how to restrain the irrational psychological characteristics of corporate management is worth our in-depth discussion.On the other hand,great changes have taken place in the domestic media environment,and all kinds of major events have been reported,gradually showing the power of the news media,there has been a growing literature on how media coverage affects corporate governance.Many scholars' studies have confirmed that news reports can improve the level of corporate governance by eliminating the information barriers between the public and enterprises to a certain extent.In behavioral finance,one of the main reasons for the irrational psychological characteristics of enterprise managers is that they think they have information advantages,and if they have irrational psychological characteristics,their decisions will be largely affected.Therefore,it can be logically speculated that the influence of media reports on management's overconfidence is an important intermediate link of media reports on corporate governance.At the same time,some previous studies have also confirmed that different types of media reports will have different impacts on corporate governance,so it is of important reference significance to distinguish positive reports from negative reports in the study.In view of this,this article from the media emotion Angle,discusses the media reports on the effects of overconfidence on executive,decided to choose for nearly 10 years of China's listed companies from 2010 to 2019 as the research object,and refer to the previous studies of establishing model regression analysis,the empirical study results show that the emotional media executive overconfidence has significant positive correlation effect,In addition,the level of overinvestment of enterprises can be influenced by this effect.That is,if the news media reports too much positive content to an enterprise,the executives of the enterprise are more likely to be overconfident,and the enterprise is more likely to overinvest.Finally,based on the above conclusions,this paper puts forward five suggestions for enterprises,media,external investors and other relevant subjects,such as suggesting that enterprises improve their management system and pay more attention to media reports,so as to help Chinese enterprises improve their governance level in practical work.