On The Correlation Between MD&A Self-serving Attribution And Future Performance

The information quality has impact on the efficiency of resource allocation. Management is inclined to prettify the financial statements out of the pressure and interest. MD&A Self-serving attribution information, flexible and changeable, is manipulated by management. By analyzing the words, sentences in attribution information, we can dig out overconfident characteristic of management and infer management decisions, and estimate the future development of the firm. MD&A, useful information, can bring incremental value for users.From the perspective of the irrational managers, in this paper, we have analyzed the tendency of self-serving attribution, have indentified the management psychology; have examined the correlation between the self-serving attribution and the future performance based on the behavioral corporate finance. The results have showed that: the more management make self-serving attribution (represents the higher level of manager overconfidence), the worse future performance will be. At the same time, Combined with the Weiner attribution effect theory, we have analyzed the correlation between self-serving attribution and future performance from the reason for site、the reason for stability and the reason for control. The results have showed:there is a negative relationship between the self-serving attribution and the future performance. In the end, we have put forward some suggestions to specify the information especially the self-serving attribution information; And we should pay close attention to managerial self-interest behavior, establish normative information and ultimately improve company value.