The Research On Managerial Investment Behavior Of Listed Corporations In China

It's very important for the listed corporations to make reasonable investment decisions, which are the key factors of growth and development. But people found that there were many strange investment phenomena that couldn't be explained by the traditional finance theories during the financial decisions of managers. Hence, some western scholars began to pay attention to the managers'investment behaviors. This brought the emergence of Behavioral Corporate Financial Theory. According to the Behavioral Corporate Financial Theory, the irrational managers and traders can both account for corporate investment distortions.Based on the Behavioral Corporate Financial Theory, we argue how the irrational factors influence the investment decisions of the corporation. By mathematical model, we find that corporation is prone to make distorted investment decisions when managers and investors are overconfident. Based on this conclusion, we describe the characteristics of the managerial behavior, using the data of domestic listed corporations. By statistics test and regression equation, we find that the managers are overconfident mostly and investment of overconfident managers is significantly more responsive to cash flow. Finally, we analyze the reasons and give some policy proposals of how to deal with the irrational behaviors especially overconfidence of the managers. Moreover, we point out the shortage and the way for further study.