Influences Of Managerial Overconfidence On Decision About Corporate Investment And The Countermeasures

In recent years, economy has a remarkable development, while small and medium-sized enterprises(SEMs) also have gain great achievements, but SMEs also has many problems with the rapid development, such as inefficient investment. Investing activities is not only a main motive to improve the development and value of enterprises, but also the greatest source of risk. Investment alienation phenomenon of SEMs have seriously restricted healthy development of enterprises. So many scholars explain this phenomenon through the traditional theories such as the principal-agent theory 、 information asymmetry theory. However, more and more phenomenon cannot be explained by traditional theories. Moreover, the psychological research result, we call it that person is general overconfidence, attacks the hypothesis that person is rational. Therefore, scholars have researched how the managerial irrational characteristic would affect the investment decisions of enterprises.On the basis of Chinese particular situation, the strict hypothesis that person is rational is gave up in this paper. The paper examines the impact of managerial overconfidence on non-efficiency investment with the empirical methods from the point of the managerial overconfidence according to the traditional theory such as the principal-agent theory、information asymmetry etc,based on the annual report from 2008 to 2012. The main conclusions can be summarized as follows:(1) there is the phenomenon of inefficient investment for the majority of SMEs, mainly including over-investment and under-investment;(2)managerial overconfidence is significantly and positively related to inefficient investment in SMEs;(3)compared with under-investment, the overconfident managers of SEMs in our country likely give rise to over-investment;(4)Compared with fixed investments, the managerial overconfidence has greater effects on innovation investments. According to the empirical analysis conclusion in this paper, we could make some recommendations to our country’s SEMs, which can promote the reasonable of investment decisions.