The Effect Of Managerial Optimism On Corporate Excess Cash Holding Level

Cash is the most important to enterprise's survival and sustainable development,and it is also the perfect asset with strongest liquidity.To a certain extent,cash is an indispensable economic resource of the enterprise,and it also affects the decision-making behavior of the enterprise to a great extent.Whether there are several financial crises that have occurred in history or from some enterprises going bankrupt due to the breakup of capital chain,we can see that only by keeping enough cash,can enterprises complete normal business payment,fulfill tax obligations and repay debts in time.However,the more cash the company hold,the more beneficial it is.?This is not the case.When enterprises hold too much or even excess cash,it is inevitable that a better opportunity for development will be lost,and there is a problem of insufficient investment.In addition,the manager is one of the important reasons for the enterprise to hold excess cash because of self-interest motivation or reducing the risk of self-decision.Nowadays,the speed of social and economic development is more rapid.Enterprises in different industries need to face not only the challenges of technology and new technology,but also more and more attention to the company's financial problems.As an important aspect of corporate financial problems,cash holdings policy has attracted the attention of scholars all over the world.The research on cash flow of enterprises began from Keynes,who mainly explained the motivation of holding cash in enterprises.Since then,more and more discussions have been made by scholars at home and abroad on the topic of corporate cash holding.Some scholars have studied the impact of corporate cash holdings on company performance.It is agreed that the level of corporate cash holdings has a positive supporting role in company performance.More scholars have studied the influencing factors of the level of corporate cash holdings.In this respect,more scholars are studying from the three aspects:corporate characteristics,corporate governance and external environmental characteristics.However,there are few studies about the impact of personal characteristics of managers on the level of corporate cash holdings,especially in China.Self-interest,overconfidence,and optimism are all the managers' characteristics that may have an important impact on corporate governance.Among them,the study aboutthe influence of managers' self-interest and overconfidence on the level of corporate cash holding has been mature and extensive.However,managers' optimism about the future investment opportunities and growth and development of enterprises is very few.Only a few scholars from abroad have explained this problem,and the cash flow problem of domestic enterprises should also be emphasized.Taking the data of Chinese listed companies as samples,excluding Financial Services Company,bad company data and so on,combined with Huang and Meier(2015)model,we try to study the relationship between excess cash holdings and managers' optimism in Chinese enterprises.Based on the models of Huang and Meier(2015),and creatively adding managerial discretion as a moderator variable,we use regression empirical test to test hypotheses.The results of the empirical study show that the optimistic managers will lead to excess cash.Meanwhile,managerial discretion plays a positive role in moderating the relationship between managers'optimism and firm's excess cash holdings.The greater the managerial discretion of managers,the more positive the relationship between managers' optimism and excess cash holding level is.In addition,There are many motives for the enterprise to hold cash,and the manager,as the chief steer of corporate governance,has a great influence on the financial decision making of the enterprise.Just because managers are optimistic about the future development of the company,they hold excess cash in the company,which is a waste of corporate resources and has a negative impact on the development of enterprises.Therefore,the board of directors and supervision departments should pay attention to this kind of phenomenon,pay attention to CEO's expectations for the company's future performance and development,limit manager'power to a reasonable level,avoid a reasonable level of cash flow for the enterprise because of the managerial optimism..