A Research On Mediating Effect Of R & D Investment Between Manager Overconfidence And Enterprise Performance

Under the context of faster-growing global economic, there are countless opportunities and challenges for the companies, the importance of innovation is increasingly prominent. In recent years, in our country R & D investment is increasing, but the performance of innovations is far lower than the Developed countries. Enterprises’ ability of the economy to innovate is the main source to enhance corporate competitiveness. Enterprises must strengthen the ability of innovate, constantly update production technology to survive in the increasingly fierce competition and ensure the long-term development of enterprises. At present, many scholars have studied the influencing factors of research and development,such as the corporate governance structure, enterprise features and the external circumstances, however, the managers are rational decision makers is the underlying assumption in these studies, they ignore the irrational behavior also can influence the corporate research and development investment. Currently, with the development of behavioral finance, more and more scholars studied the impact of manager’s irrational behavior. From the perspective of behavior finance, this paper make a study of the relationship between managerial overconfidence、 research and development investment and enterprise performance.Based on the data of companies listed on the Shanghai and Shenzhen markets, this paper analyzes the impact of managerial overconfidence on research and development investment; in addition, this paper make a study of the impact of research and development investment which is implemented by irrational managers on corporate performance. The findings suggest that, Most of the managers of the listing Corporation in China have some degree of over confidence. Managers’ overconfidence has a significant positive impact on corporate’s investment on research and development; put another way, overconfident managers tend to invest more in research and development. Managers’ overconfidence has a significant positive impact on enterprise performance through they increased their spending on research and development. In addition, there is little difference between the state-owned firms and the private sector of the impact of the manager over confidence on the investment of enterprise R & D investment.Managers are the makers of enterprise strategies; their irrational behavior is bound to affect the corporate in many ways. There have important theoretical and practical significance to study the relationship between managerial overconfidence、 research and development investment and enterprise performance from the perspective of the theory of behavioral finance.