An Empirical Study On The Influence Of Managerial Overconfidence On Over Investment

In our country is still not mature and perfect capital market system under the background of market inefficiency,the managers of listed companies of non rational,non rational individual investors are the main features of fluctuations in the stock market is still the main theme of the market,the market valuation system is still in disorder,in this case the value of the target market to effectively guide the rational behavior of enterprises,cognitive and psychological defects with managers inherent,the irrational managers of investment decision has become a common phenomenon,mainly for excessive investment phenomenon.From the existing literature,the research on how the external governance environment affects the over investment and how the Manager Overconfidence affects the over investment has made great progress.But from the analysis tool of psychology and behavior of financial discipline to study the behavior of various stakeholders in the system of corporate governance environment,external governance environment research on managerial overconfidence in governance over investment literature is relatively small.Therefore,it is necessary to further study.The unique perspective of the external governance environment based on empirical research,the premise of the existence of overconfidence in management,affecting the degree of government intervention,financial development level and the level of legal protection over investment of listed companies,and the analysis results are applied to the external corporate governance mechanism,to perfect and expand the company will have a positive effect the theoretical system of governance and enhance the efficiency of corporate governance.Based on the behavioral finance theory as the basis,with the acquisition of frequency as the managerial overconfidence index,to the extent of government intervention,financial development level and the level of legal protection as an external governance environment index,the relevant data by 2010 to 2014 1480 Sample Firms,using the panel data model to make regression analysis,to test the external governance environment on the managerial overconfidence regulation leading to excessive investment.According to the empirical results,it is found that there is a significant positive correlation between Managerial Overconfidence and over investment.The managerial overconfidence leads to the possibility of over investment more;excessive investment is positively related to the degree of government intervention and the managerial overconfidence cause,namely government intervention exacerbated the excessive investment behavior of managers' overconfidence psychology;there was a negative correlation between the excessive investment in financial development level and the level of legal protection and management overconfidence lead.That is to say,the improvement of the level of financial development and the protection of law can restrain the over investment behavior of managers'overconfidence psychology.Finally,the research conclusion and external governance environment situation,put forward the corresponding policy suggestions to the managers of listed companies and the external governance environment,so as to better constrain the irrational behavior of managers,improve the quality of management of investment decision-making,improve investment efficiency of listed companies.