Effect Of Managerial Overconfidence On Corporate Fiance Stucture

MM presented by the Miller and Modigliani, after researchers to question the company's investment and financing dec is ion-making is very concerned about the company's financing is also a hot topic of social concern. Rational economic man assumption of traditional financial theory with a large number of psychological research, research shows that most people overconfidence psychology inherent emotions. However, the business executives in the market because of emotional affect or emotional factors, in most cases, decisions are not entirely rational. Therefore, this article will not examine rational person as an object, it can further study the impact leaders have overconfidence tendencies of investment and financing structures. Our current research managers overconfidence area is still in its infancy, especially overconfidence and financial research service also studied relatively small. In this paper, by Chinese executives of listed companies overconfidence will not affect the company's financing structure experiment to study the relationship between managerial overconfidence and corporate financing structures and analyzed from the perspective of behavioral finance to look, research has certain theoretical and practical significance of corporate governance and to provide a new way of thinking.Firstly, people abandon a rational economic decision making traditional financial theory to study the relationship between business management and corporate finance overconfidence structures starting from the perspective of behavioral finance, combined with domestic and foreign research for this article hypotheses Exploration.Then described the Chinese domestic market environment, corporate finance and financing behavior characteristics and analysis manager overconfidence of investment and financing structures of Based on our 2013 listed companies between 1564-2009 panel data, the use of behavioral finance to investigate the influence of managers overconfidence companies financing behavior. Through empirical research the following conclusions:the impact of managerial overconfidence financing of listed companies significantly. Specific performance:the level of managerial overconfidence and financial companies showed a significant positive correlation; when the company's cash flow sufficient financing level also significantly increased; but the ratio between independent directors and financing the enterprise level is not significant. Thus proving managerial overconfidence is one of the important factors of corporate finance structure. Therefore, this paper increases and broadens the company's financing structure.Concluded and managers on how to improve the impact of overconfidence on corporate investment and financing structure gives policy recommendations.