Institutional Environment,Managerial Capital Overconfidence,and Dynamic Adjustment Of Consolidation

In order to maintain the long-term development of enterprises,financing needs always exist and managers need to make corresponding decisions to determine the proportion of debt financing and equity financing.Therefore,the capital structure has always been a hot issue for scholars.As a very important financial decision of an enterprise,maintaining an appropriate level of capital structure can not only maintain and promote the development of the enterprise,but also help the enterprise to realize the maximization of its value.It can also establish a good operation image externally.However,the capital structure is not a simple one A large number of studies have shown that there is an optimal capital structure,meanwhile,the optimal capital structure level will be constantly adjusted by many factors.However,in actual operation,the enterprises will inevitably deviate from the optimal level.Through the manager's decision-making,the development of all enterprises is in the process of continuously adjusting and optimizing this target capital structure.The influencing factors of capital structure mainly include three aspects:macro-environment,industry characteristics and internal characteristics of the company.The most important factor in the macro-environment is the legal environment and monetary policy.On the one hand,a good legal environment is conducive to increasing the degree of protection for shareholders and creditors and promoting the sound development of the stock market and credit market.The improvement of legal resources will affect the ability of corporate credit review and loan access,which is directly related to The capital structure of enterprises;on the other hand,monetary policy represents the supply of money in the current macroeconomic environment and whether the easing of monetary policy directly affects the ease of debt financing by enterprises.As the helm of enterprises,managers decide the development direction of enterprises in the course of adapting to the macro-economic environment and have great influence on the adjustment and optimization of capital structure.As a natural person,different managers have different behaviors and confidence levels.The existing literature has found that managers with different levels of confidence have great differences in decision-making on investment and financing.Therefore,managers with different levels of self-confidence have different opinions on the capital structure Static and dynamic adjustment have any effect?For managers in different legal environments and in monetary policy environment,is there any difference between the degree of self-confidence and the capital structure and its dynamic adjustment?Based on the above problems,based on the theory of cognitive psychology,behavioral corporate finance theory,dynamic trade-off theory and high-level echelon theory,this article will discuss the relationship between institutional environment,overconfidence of managers and capital structure adjustment.This article is divided into five parts.The first part is the introduction,which includes introducing the research background and significance,summarizing and summarizing the relevant literature both at home and abroad,and expatiating the contents,methods and innovations.The second part is to define the concept and introduction of theoretical basis,including the definition of capital structure and its dynamic adjustment,managers overconfidence and the institutional environment of the three basic concepts,and introduce the theoretical basis of this study,that is,cognitive psychology and cognitive bias,Behavioral Corporate Finance Theory,Dynamic Tradeoff Theory and Top Echelon Theory.The third part is the theoretical analysis and research hypotheses,including the analysis of the status of the managers and the capital structure,and analyzes the legal development in different regions of China from 2009 to 2014 as well as the trend of monetary policy in recent years,in-depth analysis of the different systems Environment,managers overconfidence on the capital structure and the role of adjustment mechanism,based on the above analysis of the research hypotheses.The fourth part is the empirical test.In this part,through the establishment of a model,this paper carries out descriptive statistics,correlation analysis and multiple regression analysis on the financial data of A-share listed companies in Shanghai and Shenzhen in 2009-2014.The fifth part is the conclusion of the study and the policy recommendations,the summary of the research results,combined with the current development of law and the development trend of monetary policy in our country,put forward some suggestions on the management of managers and the adjustment of capital structure.The results of the study show that:(1)Managers' overconfidence has a positive effect on the capital structure and a negative effect on the dynamic adjustment of the capital structure.(2)In areas with good legal environment,managers overconfidence have a more significant positive impact on the capital structure.In areas with a poor legal environment,managers overconfidence have a more significant negative impact on the dynamic adjustment of the capital structure.(3)When the central bank implemented the tightening monetary policy,managers overconfidence had a more significant positive impact on the capital structure and a more significant negative effect on the dynamic adjustment of the capital structure.