The Study Of Manager's Risk Preference On Corporate Investment-Cash Flow Sensitivity

The relationship of Business investment and internal cash flowing sensitive has been a hot research in the theorists. So far, the domestic and foreign scholars in this field have been carried out extensive research, has made a wealth of scientific research. However, by the analysis of previous literature, I have found that the literature is to focus on that how to select indicators of financing constraints and that how to construct theoretical models. They have neglected to discover that if their research methods and the material have some problems.Based on experimental economics and behavioral finance, this paper studies the relationships between the managers'risk preferences and the business investment cash flowing. By the fist time, the paper introduces the method of experimental in to the study. Choosing the appropriate subjects, the materials and designing of the experimental process, the treatise studies the relationship of Business investment, internal cash flowing sensitive and the risk of managers in a controlled laboratory environment. Meanwhile, the paper analyzed the similarities and differences between the conclusions from the archival data and the experimental study and found the problems in the method of archival data.The main conclusions of this paper are: The corporate investment and cash flow sensitivities are significant differences which the risk preferences of managers are differences. The risk preferences of managers may be an important factor that affects the investment cash flow sensitivity; The company, which the managers have the same type of risk preferences has the different cash flow sensitivity when the external financing constraints in different conditions. Specifically, for the managers who have the preferred type of risk preferences, with the decline in external financing constraints the investment cash flow sensitivity emergence of the variation of U-type; for the risk neutral and the risk averse managers, with the decline in external financing constraints decrease the risk neutral but managers risk averse than the downward trend ease; The research method which based on the record data needs to be improved because of the selection of the data, the selection of financial data and the selection of model construction. For the experimental research methods based on real people, the methods can reduce the problems in the above. In this paper, the attempt of import experimental research methods is successful.Based on the perspective of managers'risk preference, the paper studied their effects on the corporate investment cash flow sensitivity. The conclusions of this research in this field provides a new perspective and new ideas which enriching the content of this field. At the same time, the conclusions of this research offered the theoretical guidance for the corporate investment and financing decision, the corporate governance, the selection and appointment for the top managers.