Research On The Impact Of Managers’ Excess Positive Emotion On Company Value

With the development of the capital market,information has become an important resource of concern for people.The value of quantitative financial information transmission is limited and can no longer meet the needs of stakeholders.In recent years,the management discussion and analysis section of the annual report has received attention from stakeholders as textual information.At present,most studies believe that the positive or negative tone of annual reports has a certain amount of incremental information.However,some studies have shown that in situations of information asymmetry,the tone of annual reports can affect stakeholders’ perception and judgment of the company,and affect their decision-making behavior.The management’s excessive disclosure of good news while covering up bad news has the motivation of "information manipulation".Therefore,it is worth exploring whether the overly positive tone in the management discussion and analysis section reflects the true situation of the enterprise,and whether the management intentionally increases positive vocabulary due to self-interest,misleads investors to invest,and affects operational efficiency.This article selects non-financial listed A-share companies in China from 2010 to 2020 as the research object,comprehensively considering the internal and external supervision environment,to explore the relationship between excessive positive emotions of managers and company value.Through theoretical analysis,correlation test,basic regression analysis,grouping regression analysis,Mesomeric effect regression and other empirical studies,this paper draws the conclusion that managers’ excess positive emotions are negatively related to company value.Effective internal control and internal and external supervision by institutional investors can strengthen supervision and constraints on managers,effectively reducing the negative impact of excessive positive emotions on company value.In the expansion study,considering the differences in managers’ emotions under different operating states,it was found through group regression that in the group with low accounting information transparency,managers’ excessive positive emotions were negatively correlated with company value,while in the group with high accounting information transparency,there was no correlation between the two.In addition,in the group with high financing constraints,managers have strong motivation to manipulate information to maintain their own reputation,and excessive positive emotions of managers are negatively correlated with the company.However,in the group with low financing constraints,there is no significant correlation between the two.By stepwise regression analysis of the intermediary variable of agency cost,the study found that managers’ excessive positive emotions reduce the company’s value by increasing agency cost.In the robustness test,the regression results of the methods such as variable replacement,Logit and Probit model replacement,Instrumental variables estimation method,one phase lag of explanatory variables,and subsample test are consistent with the assumptions,and the results are still robust.This article starts from the excessive positive tone and explores the relationship between managers’ excessive positive emotions and company value,enriching relevant research on text information manipulation and prompting investors to strengthen the identification of text tone.Simultaneously exploring the impact of internal and external supervision on the relationship between the two,strengthening the supervision of textual information from multiple perspectives,improving the quality of textual information disclosure,and providing direction for the long-term development of enterprises.Based on the principal-agent theory,constructing a mechanism path of "excessive positive emotions of managers-agency costscompany value" provides certain theoretical significance for text information research.