Study On The Influence Of Overconfidence On The Performance Of Corporate Governance

As an institutional arrangement, corporate governance involves to stakeholders’ interest relationships, which decide the directions of development and companies performance. From 1930 s up to now, corporate governance theory has developed from Berle-Means paradigm to LLSV paradigm, which research about agency problem based on rational-economic man. As companies such as Enron, Worldcom’s financial scandal broke out and the development of behavioral economics corporate,governance theory based on the irrational behavior of human behavior is becoming the leading.The main part of behavior corporate governance theory is that the participant in corporate governance is irrational, and the most importance of these behaviors is over confidence. But there are few systematic studies on the behavior of these three subjects, and the research of the state-owned listing Corporation with Chinese characteristics is less. The past studies also have little notice of the problem of self selection, and the measure of the variable of overconfidence is also the focus of controversy. So, does the listing Corporation overconfidence also exist in China’s institutional background? Considering the self selection problem of overconfidence of the company’s participation in the main body, how does it affect the governance performance of the listing Corporation? This research will disscuss these questions.Based on theoretical analysis, this pwper chooses Shanghai and Shenzhen Stock Exchange’s A-shares as the sample, and analyzes the influence of the corporate governance performance. In this paper, we choose different ways to estimate overconfidence, and choose a variety of indicators to measure the effectiveness of corporate governance. We draw on the experience of Rao Pingui(2013) to establish two step effect model to solve the problem of endogenous overconfidence variables.We Specificly study if the different nature of property right of listing Corporations have overconfidence behavior, and whether the behavior will do bad effect on corporate governance.This research will be helpful to deepen the understanding of the non rational behavior of the main body of the corporate governance, and pay more attention to the effective intendence and control of the people under the system. So that the corporate governance mechanism will bee more realistic, so that the effect of corporate governance can be better played.