The Influence Of Managers' Overconfidence On The Debt Financing Of Listed Companies

Modiglian and Miller proposed MM The theory lays the cornerstone of modern capital structure theory,which relies on the rigorous premise hypothesis that capital market is effective and market participants are completely rational,but the reality is not.Especially with the rise of behavioral finance,people realize that the irrational characteristics of managers may have an impact on the debt financing decisions of enterprises.Behavioral finance has relaxed the hypothesis of rational economic man,made it closer to the reality of capital market and enterprise,studied the financial decision-making problem with a new angle and method,and explained the common "financial vision" in the capital market.Based on the research of financing theory of behavioral finance,our country is still in the initial stage,and there are less research results on managers' overconfidence and corporate debt financing decision-making.This paper abandons the assumption of the complete rationality of the managers in the traditional corporate finance theory,based on the behavioral finance theory,and analyzes the excessive self-confidence of the managers of listed companies in the perspective of the overconfidence of the managers.This article first combs the domestic and foreign scholars about the management overconfidence definition,causes the correlation research,discovers the manager overconfidence widespread and the stability existence objective reality.Then from the special institutional background and market characteristics of our country,combined with the domestic and foreign research results on financing decision-making,this paper theoretically analyzes the possibility that the listed companies in our country have excessive self-confidence in favor of debt financing,short-term debt financing and commercial credit financing.On this basis,this article will be more than or equal to the $number defined as the manager overconfidence,select 2013-2015 years China Shanghai and Shenzhen cities All A as the research object,the listed companies that disclose the third-quarter earnings report in the shares are screened to obtain the final sample observations,and the influence of managers' overconfidence on the financing decision-making is empirically studied by means of descriptive statistics and linear regression.The empirical results show that managers' overconfidence tendency is prevalent in Chinese listed companies.Moreover,managers' overconfidence is positively correlated with asset-liability ratio,short-term debt ratio and commercial credit financing,which indicates that overconfidence managers tend to be debt financing,short-term debt financing and commercial credit financing.Based on the above conclusions,this article suggests:(1)Improve the company's financial decision-making beforehand,in the event of the management System,(2)improve the internal governance structure,strengthen the management of the internal monitoring of overconfidence.