An Empirical Study On The Impact Of Managers’ Behavior On Inefficient Investment

As an essential economic activity,investment is undoubtedly of great significance to the deep integration of the market,the survival and development of enterprises,and the inflow of cash.From the perspective of managers’ behavior,it is common for managers’ agency behavior and overconfidence to lead enterprises to deviate from the optimal investment level.In recent years,to deal with the problem of inefficient investment caused by managers’ behavior,external governance mechanism has gradually attracted the attention of scholars.Compared with internal corporate governance,external governance is a more core and exogenous institutional level.As an effective means of external governance,analysts are emerging information transmitters in the capital market.With their rich intelligence network and long-term and stable contact with listed companies,they provide the market with reports predicting the operating conditions of listed companies,and managers can also learn the market’s understanding and expectation of the company.Moreover,the quantity and quality of analysts’ forecasts can influence the supervision of managers’ behavior and inefficient investment.Based on relevant theoretical research,this thesis explores the moderating effect of the quantity and quality of analyst predictions in external governance mechanism on the relationship between managers’ behavior and inefficient investment,based on the impact of managers’ behavior on inefficient investment.This thesis studies the difference mechanism of analyst attention,analyst forecasting accuracy and analyst forecasting divergence in the influence of managers’ overconfidence,agency behavior and inefficient investment.This thesis selects Shenzhen and Shanghai A-share listed companies from 2016 to 2020 as the research object,and establishes corresponding models with various variables,and conducts multiple regression analysis and endogeneity test on the variables.The results show that: first,both managers’ overconfidence and managers’ agency behavior can lead to inefficient investment.The more serious the agency behavior or overconfidence is,the more inefficient investment can occur.Second,analysts predict that quantity and quality have different moderating effects on managers’ behavior and inefficient investment.Specifically,the higher the number of analysts predicted,the more effective it was to govern the inefficient investment caused by managers’ behavior.The higher the accuracy of analyst’s prediction,the less efficient investment caused by managers’ overconfidence and agency behavior.Analysts predict that the higher the degree of divergence,the more it can restrain the inefficient investment caused by managers’ overconfidence but can intensify the inefficient investment caused by managers’ agency behavior.Finally,based on the research conclusions,suggestions are put forward from the perspective of managers and regulators such as China Securities Regulatory Commission: actively improving corporate governance to effectively restrain executive agency behaviour and cognitive bias;enhancing analysts’ professional competence and strengthening analysts’ industry status;establishing analysts’ correct professional outlook and strengthening the external supervision of CSRC.