Senior Manegers Overseas Background Overconfidence And Enterprise Performance

As the core team of strategy-planning and decision-making, senior managers have significant impacts on the profitability of the enterprise, which relates to the decision making and execution on investing, financing and profit-distributing throughout every aspects of enterprise operation and management. Hence, the academic community has been studying on the senior managers since long time. On the basis of the hypothesis of "Rationalists", traditional economics’studies on senior managers believe that profit optimization is the ultimate goal for them under any circumstances. With the rise of Behavioral Finance, the "Rationalists" hypothesis has been gradually overthrown and scholars turn to focus on the mental activity and demographic features of the senior managers. Meanwhile, over-confident, considered one of the most important findings in Behavioral Finance, has drawn attentions to the scholars.Since the Reform and Opening-up Policy was being implemented, China’s growing economy has been attracting an increasing number of Chinese who worked or studied abroad and those has become an vital part of the group of senior managers in our country.This article is a study on the interaction among the overseas background of senior managers, the personality of over-confidence and the performance of enterprise. In this article, the overseas background of senior managers has been segmented as "work overseas" and "study abroad", in the meantime, the performance of enterprise is divided into short-term performance and long-term performance. This article utilizes both theoretical and empirical methodologies. By doing so, it is based on some deep analysis and conclusions from domestic and foreign literatures, then conducts some researches on the interactions among the overseas background of senior managers, the personality of over-confidence and the performance of enterprise.The research objects of this article is the data from 2010-2012 regarding to the listed companies of A-share in Shanghai Stock Exchange and Shenzhen Stock Exchange, and the methodology of building up a Regress Model has been applied to analyze the relationships among the overseas background of senior managers, the personality of over-confidence and the performance of enterprise. Considering the measuring methods of the predecessor experts, this article measures the over-confidence, short-term performance, long-term performance by the relative compensation of senior managers, ROA and Tobin’s Q.Here are some findings:(1) the overseas background of senior managers significantly negatively-correlates to the enterprise short-term performance and significantly positively-correlates to the long-term performance; the education background of senior managers negatively-correlates to the enterprise short-term performance but not so significantly, and significantly positively-correlates to the long-term performance; (2) The overseas working and education background both can significantly decrease the managers’ overconfidence level (3) The senior managers’overseas working background’s influence on enterprise short-term performance is totally depend on their overconfidence, but overconfidence can only have part mediation effects on overseas background including working and education experience’s influence over enterprise long-term performance.In the end, I give some advice about attracting people with overseas background to the government and company based on the conclusion of this article.