| Investment is the cornerstone of micro subject development.And the quality affects the enterprise's future profitability.However,the development situation of China's enterprises exist in the characteristics of the non-efficiency investment,which has become an factor restricting the increase of enterprises' value.So what led to enterprise's non-efficiency investment? Since 1970,the research are based on the information asymmetry theory and principal-agent theory of "rational person hypothesis".However,a person is limited rational.The cognitive bias in the decision-making process is influenced by gender,other explicit characteristics and deep psychological characteristics.Psychological research shows that higher levels of class management,longer time for professional work and a high degree of control over enterprises' decision-making lead to the more general situation that enterprises' managers have overconfidence.It has a crucial impact on the enterprise investment efficiency.Therefore,this paper studies the influence of managerial overconfidence on inefficient investment.Non-efficiency investment has hindered the steady economic development.How to inhibit the non-efficiency investment has become an urgent problem.The earlier literature focused on the importance of formal system.However,we should note that informal institutions,such as traditional culture,play an important role in restraining non-efficiency investment.At the nineteenth CPC National Congress,the important speech of general secretary Xi Jinping also mentioned that the excellent traditional culture is the foundation of and provides a way to solve the problems.Therefore,based on the traditional finance theory and behavioral finance theory,this paper examines whether there is a direct relationship between managerial overconfidence and non-efficient investment.And this paper takes the traditional culture as the breakthrough point to study the direct influence of the traditional culture on the non-efficiency investment,especially on the non-efficiency investment caused by the managerial overconfidence.And this paper provides empirical studies to understand the traditional culture.This paper selects the listed companies of Shanghai and Shenzhen A shares from 2009 to 2016.From the investment expectation model of Richardson(2006),this paper estimates the expected level of investment,and get residuals,and take the absolute value as the level of non-efficiency investment.For managerial overconfidence,this paper uses CEO's relative compensation and managerial ownership change as an alternative variable.We use the map tool to retrieve the latitude and longitude of all listed companies,key temples,Taoist temple and Confucian Temple,then computes distance and uses the total number as the traditional culture strength variables.It is found that the managerial overconfidence is positively related to the level of non-efficiency investment.The traditional culture has a good inhibitory effect on the non-efficiency investment,especially the inefficient investment made by managerial overconfidence.In addition,this paper uses three different traditional culture of Confucianism,Buddhism,Taoism to carry out regression analysis.It shows that different traditional culture have different moderating effects on non-efficiency investment caused by managerial overconfidence.The main innovation points of this paper:(1)Due to the late start in China and the special institutional background,domestic scholars mainly focus on irrational factors in the process of corporate financing,mergers and acquisitions,as well as irrational factors of investors.This paper is based on the actual situation of our country,carries on the empirical research by using data from 2009 to 2016 China Shanghai and Shenzhen A shares of listed companies,from the perspective of managerial overconfidence to explain the problem of non-efficiency investment of Listed Companies.(2)Due to the limitation of the formal system and the reality of our country,the effective operation of our society still need rely on informal system(Willimson,2000).This paper extends the research from a single religion to the traditional culture,and extends the empirical study.And it concerns how the traditional culture to reduce the non-efficiency investment.And it has provided a perspective for understanding the informal institution.Because the religious strength variable before mainly concentrated in counties or areas,it can easily lead to cross problem(Du,2013).So according to the geographic proximity,this paper quantifies the traditional cultural intensity variables from the enterprise level,which makes the research results more reliable. |
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