The Effect Of Overconfidence Of Managers On Cash Dividend Policy

Dividend policy is an important profit distribution and financial decision-making content of listed companies.In 2006,the "Administrative Measures for the Issuance of Securities by Listed Companies" issued by the China Securities Regulatory Commission put forward clear requirements for the distribution of dividends of listed companies,which provided an institutional background for studying the behavior of managers and cash dividend policies of listed companies in my country.Under traditional finance,most of the research on dividend policy lacks consideration of the irrational factors of decision-making subjects,while behavioral finance pays more attention to the role of decision-making subjects’ individual psychology,preferences and other factors in behavior selection,which is a good way to study managers’ overconfidence.The impact on cash dividend policy provides a theoretical basis.In 2010,my country officially launched the securities lending transaction,which ended the state of the unilateral stock market in my country.Investors monitored and punished company managers through short-selling transactions to restrain managers’ irrational behavior.The impact of behavior provides a practical context.Therefore,this paper takes the development of the securities lending mechanism as the research background,and analyzes the impact of managers’ overconfidence on the cash dividend policy of listed companies in my country.Based on overconfidence theory,dividend policy theory and principal-agent theory,this study analyzes the relationship between managerial overconfidence and cash dividend policy and the moderating effect of securities lending mechanism between them.Hypothesis test through multiple regression model,empirical results show that,firstly,managers’ overconfidence has a significant negative impact on the willingness and level of cash dividends of listed companies in my country.Over-investment and other irrational behaviors,so as to meet capital needs by reducing cash dividend payments;secondly,for listed companies that are included in the scope of securities lending targets,their willingness and level of dividend payments are increased.behavior,using the short-selling mechanism to make profits,the management is forced to issue cash dividends under the pressure of this kind of stock price decline and release positive signals.At the same time,the securities lending mechanism significantly inhibits the low dividend payment willingness and level caused by managers ’ overconfidence.The introduction of the securities lending mechanism can play a role in external supervision and governance.By restraining managers’ overconfidence and restraining managers’ excessive investment behavior,the willingness and level of cash dividends can be improved.Finally,under the different nature of property rights,compared with state-owned listed companies,private listed companies are included in the scope of securities lending targets,and they have a stronger inhibitory effect on the low dividend payment willingness and level caused by managers’ overconfidence.Based on the empirical research results,this study puts forward relevant suggestions from the perspective of restraining managers’ overconfidence and promoting the development of securities lending transactions,thereby improving the implementation level of the cash dividend policy of listed companies in my country.