Research On The Influence Of Managers’ Overconfidence On Corporate Financialization From The Perspective Of The Analyst’s Attention

In recent years,China’s market demand has gradually shrunk,the profit space of the real economy has been continuously compressed,more and more enterprises choose to allocate financial assets to obtain excess profits,and the phenomenon of enterprise financialization has become increasingly intensified.A large amount of capital flowing into the financial sector will cause enterprises to deviate from the goal of sound operation and sustainable development at the micro level,and eventually move towards "hollowing".At the macro level,it will cause structural imbalance between the real economy and the virtual economy,and aggravate financial risks.Various indications show that the solution of the problem of "turning from real to virtual" in China’s economy is important.According to the high-level echelon theory,the personal characteristics of managers will affect investment decisions,including corporate financialization,and the cognitive bias of managers’ overconfidence is an important determinant of managers’ decision-making motivation and behavior.Therefore,it is of great significance to study the phenomenon of corporate financialization from the perspective of managers’ overconfidence.The existing literature has studied the problem of enterprise financialization,mostly from the perspective of market factors such as financing constraints,and less attention is paid to the influence of managers’ decision-making motivation and behavior.The literature shows that scholars have studied a lot of the impact of managers’ overconfidence on the investment efficiency of enterprises,but whether managers’ overconfidence has an impact on corporate financialization investment,and how the determining factors and processes of this influence are,are worth exploring in depth.This paper argues that the influence of managers’ overconfidence in corporate financialization decision-making is influenced by the combined effects of managers’ own characteristics and corporate governance.Among them,analyst attention is an important part of the company’s external governance environment.Therefore,this paper empirically examines the impact of managers’ overconfidence on corporate financialization based on the moderating role of analysts.This thesis takes China’s A-share listed non-financial enterprises from 2010 to 2021 as a sample,and uses normative analysis and empirical analysis to study the impact of managers’ overconfidence on corporate financialization.Finally,the following conclusions are obtained:(1)The overconfidence of managers promotes the improvement of corporate financialization.(2)Analysts’ attention can alleviate the role of managers’ overconfidence in promoting corporate financialization.(3)Analysts’ attention has a stronger alleviating effect on value-preserving financial assets caused by excessive confidence in managers.(4)In the enterprises with a lower level of internal governance,analysts’ attention has a stronger alleviating effect on the financialization of enterprises caused by excessive confidence in managers.There are two main innovations in this paper:First,it puts managers’overconfidence into the company’s internal and external governance environment,and systematically studies corporate financialization based on the characteristics of managers.Second,in the empirical analysis,in order to better reveal the external governance role of analysts,this paper also distinguishes the types of financial assets and internal governance levels of the sample enterprises to reveal their heterogeneous impact.