The Impact Of Managers' Over-confidence On Companies' Financial Decisions

The phenomenon of managers overconfidence are very common in listed companies, which not only influenced by the managers themselves, but also by a corporate environment, companies mechanisms and other factors, the behavioral characteristics of their overconfidence will have an important impact on corporate financial decisions .On the basis of analysis on overconfidence and related financial decisions theory , this article use listed companies of Hebei Province which put up Shanghai and Shenzhen Stock Exchange in 2006-2008 as samples, with empirical research on the relationship of managers overconfidence and financial decision.First, the paper expounds the research background, significance and application prospect, based on the literature review at home and abroad, the paper puts forward the research opportunities. It analyzes the deficiency of existing overconfidence and financial decision empirical theses, raise the problems, research content and framework.Second, it Study the influence of managers overconfidence on enterprise financing decisions in listed company. It expounds the basic theory of managers overconfidence and financing decisions, based on this, it puts two hypothesis, and establishs three models, tests hypotheses through empirical analysis. Test results show that managers overconfidence and debt levels, debt maturity is related among listed company.Third, analysis the relationship of managers overconfidence and investment decisions. It analysis the influence of managers overconfidence the investment decision based on the investment decisions theory. Empirical results show that Hebei listed company managers overconfidence and related positively to the investment level.Fourth, it study the influence of listed company managers overconfidence on distribution decision-making, With cash dividends as the main research object, using logistic regression analysis and multiple linear regression analysis method. The empirical results show that managers overconfidence, company distributes tendency and Intensity distribution are related.Finally, based on the theoretical analysis and empirical research results, it explain the adverse effects of manager overconfidence on financial decisions, and make recommendations to avoid overconfidence.