| Enterprise investment behavior has been one of the hot topic of academic research, it also the topic that we focused on in the company’s operation management, especially Chinese government which is investment-led economy. From the macro perspective, enterprise investment, consumer spending and net exports are referred to as the troika of promoting economic growth, so enterprise investment has the vital role for the development of the national economy. Chinese government carried out 4,000 billion investment plan in the globe financial crisis, it couldn’t get what we desired effort, it brought a lot of over-investment and we have to’reduced capacity and reduced inventory’. From the micro perspective, the investment is the most important decisions for a company, it is the major driving factor for company’s growth and the main basis of future cash flow growth, investment will directly affect the level of profitability and operating risk, but also affect the financing and dividend distribution and other corporate financial policies. However, a growing number of studies have found that there are frequent phenomena of underinvestment or overinvestment. People put forward the following question:Expect for the factor of macro and micro, are the behavior of managers rational? If the managers’investment behavior is non-rational and imperfect rationality, what kind of effect that the manager’s behavior and psychological bias might bring have on the company finance, investment and merger and acquisition? What kind of influence on the company if the managers make the non-rational decision among the many factors? This article study the influence of managers overconfidence on corporate investment behavior by learn from the phenomenon of stable psychological bias of people overconfidence which was found in psychology, using the prospect theory of behavioral economics, by studying and trying to provide the new theory explain and empirical evidence of the inefficient investment of the corporation and it has the important theory significance and the practical significance.From the perspective of managers’ non-rational, the article study the relationship between managers’ overconfidence and investment behavior by the theoretically analyzed and empirical studied. The article take the public company’s information of Shanghai security exchange and Shenzhen security exchange as the study sample during 2008 to 2013, using the methodology for statistical research, such as descriptive statistical analysis, multiple regression analysis and so on, empirical analysis for the managers overconfidence on the influence of corporate investment amount and investment efficiency, and further from the managers. Furthermore, from the perspective of managers’ heterogeneity and financial constraints, the article tests the influence of managers’ overconfidence on corporate investment decision-making and obtains some meaningful conclusions.The dissertaion takes the main research work and research contents are as follows:The first chapter is introduction. This chapter introduces the background and significance, research ideas and research methods, research content and frame structure and innovation.The second chapter is literature review. About the research topic and content, the chapter respectively reviews and teases out the related research of overconfidence, corporate investment behavior and the relationship between managers overconfidence and corporate investment behavior, and then review the existing literature, so as to lay out the article’s research basis and research starting point.The third chapter is the key concepts and theoretical basis. Firstly, the chapter define the concept of managers overconfidence and corporation investment which are discussed in this article; secondly, the chapter set forth theoretically the influence of psychological factors on the behavior; the thirdly, the chapter set forth respectively the new classical investment theory and corporation investment theory based on agency conflicts and corporation investment theory based on asymmetric information; finally, the chapter abandons the completely rational assumption, focus on discusses the corporate investment theory from the managers irrationality, illustrates the mechanism that managers overconfidence leads to investment distortion such as excessive investment and insufficient investment, and provides a theoretical basis for the empirical research of the influence of managers overconfidence on the corporate investment behavior.The fourth chapter is empirical research design. According to the article’s research topic, this chapter proposes the research hypothesis of managers overconfidence on the corporate investment amount and investment efficiency and the research hypothesis of the influence of managers’ overconfidence on the corporate investment behavior which are based on managers’ heterogeneity and financing constraints; and then explain the main variables, data source and sample selection that needed for the article’s empirical study, finally, the analysis model is given.The fifth chapter is the empirical analysis of managers’overconfidence to the corporate investment behavior. By using the method of descriptive statistical analysis and multiple regression analysis, the chapter examines the influence of managers’ overconfidence on the corporate investment amount and investment efficiency, then robustness test is made accordingly.The sixth chapter is the extended empirical analysis I of managers overconfidence to corporate investment behavior:based on the perspective of managers heterogeneity. This chapter empirically examines the influence of managers’ gender, age and education background on the corporate investment level and investment efficiency. The sample is divided into state-owned public corporation group and non state-owned public corporation group and two group samples is comparative analysis and test, the robustness test is made accordingly.The seventh chapter is the extended empirical analysis II of managers overconfidence to corporate investment behavior:based on the perspective of financial constraints. This chapter empirically examines the influence of managers’ overconfidence on the investment cash flow sensitivity under the circumstance of corporate facing financing constraints. The sample is divided into high level of financial constraints and low level of financial constraints, state-owned public corporation group and non state-owned public corporation group. The chapter empirically examines the influence of managers’ overconfidence on the corporate investment on the sensitivity of total cash flow, equity cash flow, obligatory right cash flow and operating cash flow, then robustness test is made accordingly.The eighth chapter is conclusion. On the basis of the above chapters, this chapter summarizes the main conclusions, and points out deficiencies and future research direction.Through the above research, this paper gets the following conclusions:1. Managers overconfidence significantly improves the level of the company’s investment, and the effect is stronger for state-owned public companies than non-state-owned public companies. Managers overconfidence significantly increases the degree of company’s over- investment, namely boosts the company’s investment efficiency. Managers overconfidence significantly corrects the degree of company’s under-investment, namely reduces the company’s investment efficiency. The above effects of managers’overconfidence on corporate investment efficiency are stronger for state-owned public companies.2. Managers heterogeneity has impacts on the relationship between managers’ overconfidence and corporate investment level, and managers’overconfidence and corporate investment efficiency. The results show that:(1) Male managers can strengthen the positive effect of overconfidence on the corporate investment level relative to the female managers. Male managers can enhance the positive relationship between overconfidence and corporate over-investment, thus reducing the investment efficiency, relative to the female managers. Male managers can enhance the negative relationship between overconfidence and corporate under-investment, thus improving the investment efficiency, relative to the female managers, but only samples of state-owned listed companies support the conclusion.(2) Yong managers can strengthen the positive effect of overconfidence on the corporate investment level relative to the older managers. Yong managers can enhance the positive relationship between overconfidence and corporate over-investment, thus reducing the investment efficiency, relative to the older managers. Yong managers can enhance the negative relationship between overconfidence and corporate under-investment, thus improving the investment efficiency, relative to the older managers.(3) Managers with financial and economic education background can weaken the positive effect of overconfidence on the corporate investment level relative to the managers with an education background of science and technology. Managers with financial and economic education background can weaken the positive relationship between overconfidence and corporate over-investment, thus reducing the investment efficiency, relative to the managers with a education background of science and technology, but only samples of non-state-owned public companies support the conclusion.3. Managers overconfidence has a significant influence on corporate investment cash flow sensitivity, and the higher the degree of financing constraints faced by companies, the greater the effect role of managers overconfidence. Specifically, companies show sensitivity to the total cash flow and equity cash flow show, but not the creditor’s rights cash flow and operating activities net cash flow.Managers’overconfidence significantly increases the sensitivity of investment to the total cash flow, equity cash flow and creditor’s rights cash flow, but not the operating activities net cash flow sensitivity.The comparison results between the state-owned public company sample and non-state-owned public company sample show that the sensitivity of investment to cash flow for the state-owned public companies is higher than the non-state-owned public companies; marginal effect of cash flow on the corporate investment is larger for the state-owned public companies. Furthermore, taking into the consideration of financing constraints, the higher the degree of financing constraints faced by companies, the higher the sensitivity of investment to cash flow; The higher the degree of financing constraints faced by companies, the greater the impact of managers overconfidence on the investment-cash flow sensitivity.
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