Study On The Relationship Of Managerial Overconfidence, Capital Structure Choice And Corporate Performance

With the rise of the study of the behavior of the company’s finance,irrationalbehavior of managerial overconfidence gradually entered the vision of scholars, moreand more scholars began to focus on the relationship between managers irrationalbehavior and corporate decision-making. The capital structure decisions as Finance,one of the three branches, is also of concerned. Especially the behavior of managerson the capital structure of the financing decision has also become a hot topic. Thereare a lot of articles from different angles to study the capital structure of the company,but did not consider the impact of psychological factors or into which the irrationalbehavior of the managers. Therefore, the paper attempts to research the relationshipbetween managers overconfidence, the capital structure choices and corporateperformance, and start with the perspective of behavioral game analysis therelationship between manager overconfidence and capital structure,then use empiricalmethod to make a comprehensive analysis, and come to a conclusion.View of the above, the subject of the managers overconfidence behavior blendwith the capital structure and corporate performance, but also from a new perspectiveto analyze the relationship between them, then capital structure theory to be furtherdeveloped. The idea of such a comprehensive analysis of other information, so basedon this point to discuss, verify, not only complements the theory of capital structureand more sophisticated capital market, but also the development of the enterpriseshave a certain reference.Firstly, based on the the literature review, put all the study in-depth analysis.Research methods related to the game model and the number of economic model.Theoretical basis include behavioral corporate Finance, capital structure theory,behavioral game theory and performance theory, based on these basic theories, mainlyon two issues: one is based on behavioral game theory to study the impact of behaviorof managers overconfidence on capital structure decisions,using the game model toanalyze and draw a correlation; second,research the impact of managersoverconfidence and capital structure on firm performance, use the country listedcompanies as samples, the financial indicators as a measure of capital structure andcorporate performance variables, using the method of linear regression to make an empirical test on the relationship between managers overconfidence,capital structureand corporate performance.This paper selects the2010-2012listed companies as research samples,usingSPSS statistical software to analyze verification, and finally concluded:(1)overconfident managers tend to short-term liabilities;(2) overconfident managers willimprove business performance;(3) using excessive liabilities will lead to a decline incorporate performance, but the short-term liabilities may improveperformance;(4)capital structure from the part of the intermediary role betweenmanagers overconfidence and firm performance. Finally, inspiration and policyrecommendations based on the empirical analysis of the results, and look to the futureresearch directions.