Research On The Impact Of Managerial Overconfidence On Dividend Policies

Dividend policy plays an important role in the decision-making of a company’s future investment and financing.It is not only an important part of the management of listed companies,but also the result of the game between the various stakeholders.In China,the dividend policy form of the listed companies is varied.However,due to the imperfection of the domestic capital market,there are many problems in the dividend distribution of the company,such as high transfer and distribution.The traditional theory of dividend has been difficult to explain the emergence of many "irrational" status quo.The emergence of behavioral finance theory provides a new perspective for the anomaly of the market.It abandons the basic assumptions of rational people in traditional theory and analyzes and studies the irrational dividend policy from the perspective of behavior and psychology.Based on the research results of the predecessors,it is found that the managers have a great influence on the daily operation of the company.The development of the company is also closely related to its behavior.In reality,the managers are likely to produce psychological cognitive bias,over estimate the ability to make the wrong decisions and thus damage the value of the enterprise.Therefore,this article introduces the irrational behavior of managers’ overconfidence,and studies their influence on the company’s dividend policy from both theoretical and empirical aspects.In the paper,the literatures are reviewed and sorted out at home and abroad.Secondly,the relevant theories are understood and analyzed and the hypotheses are put forward.Finally,the empirical model is used to test the relationship between management overconfidence and corporate dividend policy,then use the gender diversification and property rights as regulatory variables,to further explore theimpact of overconfidence and dividend policy.In this paper,the number of voluntarily holdings of managers is taken as a measure of overconfidence,and the A-share listed companies in China in 2011-2015 are selected as the research samples.After the screening,9791 observations are obtained,among which 3108 are overconfident,Non-self-confidence samples were 6683,and the use of statistical software SPSS17.0regression analysis of the data.The following conclusions are obtained:(1)Overconfident management has a negative impact on dividend policy compared with non-overconfident management.(2)Gender diversification plays a negative role in regulating the relationship between overconfidence and dividend policy,that is,with the increase of gender diversification,the negative influence of management’s overconfidence on dividend policy is strengthened.(3)The property rights plays a positive role of overconfident management and dividend policy,when the property rights is state-owned enterprise,the management of overconfidence in the negative impact on the dividend policy weakened.(4)Gender diversification and the property rights of the management of excessive self-confidence and dividend policy relationship between the dual adjustment role.That is,gender diversification will strengthen the negative relationship of the management’s overconfidence and dividend policy,but the property rights will weaken the positive influence of gender diversification.The research of this paper applies the psychology view and the behavioral finance theory to the enterprise financial decision-making,which enriches the existing managers’ overconfidence theory.It can correct the behavior deviation of the managers,correct the internal governance and provide policy advice on appointment of talents,which will help reduce the irrational behavior of managers on the adverse effects of the company,so that enterprises can move towards the direction of further development.