The Research Of Effect Of Top Managers’ “Envy” On Corporate Over-investment Based On Gem Listed Companies

To the extent that corporate behavioral finance has achieved rapid development in our country, the vacancy of empirical research about top managers’ irrational effect on corporate investment decision has been effectively filled. Nonetheless, empirical research literatures from the respect of the impact of top managers’ envy on corporate investment(especially the over-investment) were still scarce. In addition, there was no in-depth analysis referring to the difference between "envy" and "jealous". This article took advantage of the remarkable difference between two sample group, i.e. the GEM listed companies and the state-owned listed companies in our country, in the comparative analysis to explore the interpretation of corporate over-investment in the view of top managers’ envy, which was of great significance to improve the investment efficiency of corporations.Firstly, this paper systematically combined and analysed the domestic and foreign related literatures in three aspects, finding the gap in the existing research, then formed the research ideas. by elaborating the related concepts and theories of “envy”, “mental accounts” and “compensation contract” which has layed the theoretical foundation for follow-up research and analysis. Secondly, based on the two types of samples just mentioned above, top managers were found in the pursuit of corporate scale and individual payment utility, through quantitative analyses of current status of top managers’ compensation, corporate investment. Thirdly, this article launched a derivation about whether there was a possibility that “envy” act as a trigger for over-investment, the result showed that "envy" of top managers caused by payment gap was likely to prompt top managers to abuse their power and resulting in corporate over-investment. In addition, the greater the number of the objects being envied, the heavier the over-investment tendency of other top managers. As such, to some extent, this part proved the research significance of this paper. Regression tests have been made for the relationship between top managers’ "envy" and corporate over-investment by taking advantage of two types of samples and different models. And these results with robustness, basically came to the sameconclusions consistent with expectations hypothesis Finally, this article put forward the corresponding policies and proposals according to the conclusions of of this research.