Research On The Enterprise Investment Decision-making Problems Based On Behavioral Finance Theory

As the starting point for financial decision-making, investment decision-making is the key driving force for enterprise growth and an important foundation for earnings growth. From the perspective of traditional theory, irrational phenomenon of financial managers for investment decisions can not be given a reasonable explaination, so behavior psychology is inroduced to financial theory, which explains and analyses psychological bias of financial managers in decision-making. Therefore, behavioral finance come into being. The object of behavioral finance extends from investors'behaviors to managers'decicion-making behaviors.The theory is that enterprise investment decision-making are affected mainly by the irrationality of intra-business managers and extra-business investors.Thereinto, managers' irrationality (such as overconfidence, regret aversion, self-control, etc.) will lead to overinvestment or underinvestment. But extra-business investors' irrational sentiments also play a part in managers' decision-making, which result in investment distortion.The thesis chooses influencing factors of business investment decision-making to be the object of research, analyses rational and non-rational factors in investment decision-making from the perspective of behavioral finance, and tests them with empirical evidence.The full thesis is divided into five sections.The first part is the introduction in which the background, meaning, innovation, methods, and status in quo home and abroad of the research are given. The second part is summarization of behavioral finance theory, which discusses the development, theoretical base and main content of behavioral finance theory. A basic frame of analyses, which uses behavioral finance theory, is established through this part's presentation.The third part tells the status quo of business investment decision-making. Primarily, many examples are given to analyse investment decision-making. Then problems in decision-making are found. Afterwards, combining traditional finance theory and behavioral finance theory, analyses kinds of rational and irrational factors which exercise influence over investment decision-making more roundly. The fourth section verifies that whether or not these factors affect investment decision-making and how much they affect. Both theoretically and empirically, basing on behavioral finance theory, the last part gives analyses and interpretations on investment decision-making. On the one hand, pieces of advice is given to regulate decision-making mechanism politically; on the other hand, proposals are proposed to cut the cost of behavior resulted from non-rational factors of managers and investors.