Empirical Study Of The Relationship Between Gender And Financial Decision-making

Financial decision-making plays a vital role in the process of the enterprise production activity to create value. It not only determines the enterprise asset allocation and impact on corporate capital chain structure, but determines the sources of funds and the cost of capital. Reasonable and suitable financial decisions for corporate, can promote healthy development of enterprises, enhance corporate value, otherwise bound to hinder the development of enterprises, reducing their life. So in financial decision-making process, the executives play a vital role,The structure of Executives, their overall level of knowledge, experience, and other aspects all affecting the direction of financial decision-making and the business operations risk level.Since the1950s, scholars conducted many in-depth research of financial decision-making, capital structure theory, the capital asset pricing model, dividend policy theory, for instance, has deepen people’s understanding of financial decision-making, guiding people to make rational financial decisions. However, the traditional financial theory draws on the way how economics did research, seeing people as a completely rational person, that people can make an unbiased estimate of the future throw the full process information handling, completely ignored the impact of human emotion, risk appetite levels and cognitive biases, such as for decision-making. Incur the criticism of some theory such as Maslow’s hierarchy of needs、bounded rationality theory and behavioral science theory. These theory deem that people are bounded rationality, people in the decision-making process is not entirely in accordance with the utility maximization decisions. Precisely because of the neglecting of emotional perception in the progress of financial decision-making, some financial phenomenon deviated in reality which led to the rise of behavioral finance.Behavioral Finance challenge to traditional assumptions provides a new perspective for corporate governance, the theory is not based on rational expectations, risk aversion and assumptions discretionary basis, but by analyzing the behavior deviation of market players to seeking philosophy and decision-making behavioral characteristics of different players, so as to establish descriptive models which can accurately reflect the main decision-making behavior and market operation.Business managers’ irrational behavior and its impact on corporate financial decisions has been more and more attention, of course, also achieved important results. Starting from the managers’irrational behavior, study their impact on corporate financial decision-making, in order to compensate for the lack of traditional corporate finance theory to explain the impact on the financial decisions of different individuals have more significance.In the managers’irrational behavior, overconfidence is generally scholars study undoubtedly. In China, due to the influence of internal and external factors such as Confucian culture, the reform and opening-up policy and economic transformation, business managers prone to overconfidence, but as the proportion of women in management is gradually rising, this phenomenon might be improved. Because from the social psychology point of view, women are not easy to produce overconfidence compare to men. Many studies have shown that, when making corporate decision especially financial decision, men are more overconfidence to women. So make some of the larger risk decisions.In China, due to the influence of Confucian culture and thousands of years of feudal imperial system, in one enterprise, the chairman has the absolute core power. Business decisions, including financial decisions depends largely on corporate chairman’s personal management style and his risk appetite. Therefore by the sample of the female chairman to study the relationship between the gender and the corporate decision-making, including the impact of financial decisions is more in line with China’s reality compare with the study how gender of senior management influence business decisions. In addition, some of our industries, corporate, hiring women involved in corporate management just to satisfy external effects, to establish a kind of good image to stakeholders, with symbolic significance.Based on the theoretical analysis, based on behavioral finance theory, the proportion of women in senior management of one companies as a starting point. uses the panel data of Chinese listed company from2008to2012to study its relationship with the company’s financial decision-making. And based on the existing research, study the relationship between the proportion of women in senior management and company overconfidence. Unlike other research, in this paper we definite overconfidence as a confidence that contains optimistic attitude.