Entrepreneurs Overconfidence Effect Of Family Business Financing Decisions

In recent decades, along with the conduct of the reform and opening up, our family business has been greatly developed, and has gradually become the focus of research scholars and policy makers. On family business and even family enterprise financing structure issues are becoming increasingly widespread attention.Joint-stock enterprise, the family business is composed of two subsystems of family and corporate organic whole is worth noting that while the family business entrepreneurs not only has the residual claims of all or part of the enterprise, also almost completely mastered the enterprise control over. In other words, the formation of the financing structure of the family business is completely a reflection of the family, individual entrepreneurs will establish decline in the decision-making of the Board or managers rational premise mainstream finance theory in the interpretation of force to solve such problems.Through theoretical research and empirical research on the domestic and international behavioral finance theory and financing decisions relationship carding, draw entrepreneurs widespread overconfidence mental characteristics have a certain impact on corporate financing decisions and the Overconfidence irrational behavior, and its main capital structure and debt maturity structure. Further support the theoretical research and testing of this article, in the form of a survey, to obtain first-hand information of the family business conditions and the financing situation, overconfidence psychological and family business entrepreneurs direct measurement using descriptive statistics, statistical methods of correlation analysis and multiple linear regression analysis, an empirical test of family business overconfidence and financing decisions.In this paper, the following conclusions from the above research and analysis.First, due to the overly optimistic overconfidence by entrepreneurs for the company’s future investment income, there is a strong impulse to invest, tend to be the higher level of indebtedness; second, over-confident entrepreneurs will overestimate the prospects of the project, that the future cash flow is more secure, while the higher the amount of long-term loans, lower transaction costs, and therefore more willing to use long-term debt financing.