Ownership Structure, Executive Over-confidence And Inefficient Investment Enterprises

The current behaviour of the finance, the research shows that managers in the investment decision,often influenced by its own individual psychological factors,especially the managers over-confidence psychology.Over-confidence,as one of the managers deep-rooted psychological characteristics,shown the overpricing of their own ability and the project benefit of overly optimistic,natural was very great influence on its make the investment decision,at the same time also has a far-reaching influence on deepening the efficiency of investment.Capital structure governance of the basic internal governance directly affects the company, its establishment and operation,and introduced to the company all the major decisions have important influence.In this paper,with the help of our predecessors,managers over-confidence in the field theory and empirical research,try to find the inhibition of executive over-confidence leads to the inefficient investment level governance factors,to help set up a more reasonable equity structure makes the corporate governance more effective,also has a rich relevant managers overconfidence academic literature in the field of the study.Combination of specification and assumption, this paper summarizes the results of previous research, from the content, and also the direction of writing,which can inhibit the equity structure adjustment for executive overconfidence leads to inefficient investment.Secondly,according to deduce the problem,put forward the corresponding assumptions,at the same time,set the econometric model,to test analysis of the deduced for further.Finally, the results of the theoretical and empirical studies have been summarized and presented policy recommendations.This article is based Chinese special economic system and corporate governance background, nearly purpose Shanghai and Shenzhen A-share listed companies as samples of three years, on the one hand literature review of existing research results for some sort, so as to equip basic theoretical framework for the study of the theoretical basis of this paper, on the other hand, by summarizing the literature of their predecessors, can find an angle to think, to provide research direction for this study. This article summarizes the basis to determine whether to adjust the ownership structure of the research enterprise can be suppressed due to inefficient investment executive overconfidence lead, then econometric model to derive assumptions for further examination and analysis, and concluded : in reality, corporate governance, there is damage to the interests of the company and its shareholders because the phenomenon of overconfidence managers subjective mental attitude caused because, according to the corporate governance structure, and mastered the business of the company, use of shareholder information asymmetry, as well as on their own over-confidence, coupled with the lack of effective oversight bodies and processes, it is possible according to management’s arbitrary and make a person not conducive to the company and shareholders. In the modern corporate governance, shareholders’ interests and the interests of the board needs an effective balance, although the former is unable to participate in the actual course of business, but as the owner of the company and the equity interests of the sufferers, and the latter is also the principal, there is the other party claims to act in accordance with their own interests; the latter in modern corporate governance increasingly high, because in the first line of business, and has professional management knowledge, but do not enjoy the ownership of the company, at the same time as a shareholder agents, their behavior is also the basis to accept supervision and constraints. From management’s overconfidence caused the loss of perspective to explore the management of behavior and restraint mechanisms to increase efficiency and investment decisions.