Study On The Influence Of Female Executives And Political Connections On Over-Investment

As one of the three carriages in stimulating economic growth,investment plays a very important role in the economic development.Although the investment subject have national level and enterprise level,the investment results eventually are reflected in the performance of the enterprise.In recent years,the domestic and foreign scholars has found a large number of over-investment in Listed Companies of China.Many scholars use the political connection as a starting point to explore the influence of institutional environment on over-investment.A large number of studies have confirmed that the political connections exacerbated the degree of over-investment.Other scholars have studied the gender characteristics of managers,and it has been found that female executives have an inhibitory effect on over-investment.So what is the mechanism behind this two effects?How this two effects produce the final superposition effect on over-investment?This series of problems are worthy of further research and exploration.In this paper,the data of 2009-2015 years listed companies in China was the study sample.Richardson(2006)model was used to measure the company's over-investment degree.According to the theory of overconfidence,political association intensifies Managerial Overconfidence and enhances enterprise risk level.Then the level of excessive investment has been improved.However,because of the fact that the female executives are not overconfident and risk averse,they can effectively counteract the adverse effects of political connections on the over-investment of enterprises.Based on the final effect of political association and over investment,this paper puts forward the hypothesis that the combination of female executives and political factors can significantly inhibit the over-investment of enterprises.The following conclusions are drawn from empirical regression:(1)Female chairman or general manager,female chairman,and female who is chairman and general manager have an inhibitory effect on over-investment.(2)Establishing political connections lead to over-investment excessively,and the level of political connection is higher the over-investment is more serious.(3)Although female chairman or general manager associating with political connection can ease the degree of over-investment,the regression was not significant.(4)The combination of female who is chairman and general manager and political connection can not restrain the excessive investment.(5)While the joint of female chairman and political association can significantly inhibit excessive investment behavior.In the listed companies with political connection and female chairman,the excessive investment of enterprises have been significantly inhibited in the overall sample,and the sample of state-owned enterprises,and the sample of non state-owned enterprises.Through the research,we find that political connections will promote the managerial overconfidence psychological construction and the risk further intensified,that indirectly enhance the level of corporate over-investment.But the female characteristics of not overconfidence and risk averse just can offset portion negative influence on over-investment that brings by the political connection,and reduce the occurrence of excessive investment phenomenon indirectly.This is the mechanism of how female who is chairman and general manager and political association effect on over-investment in enterprises.At the same time that female officers served as chairman of the board can significantly weakened the adverse effects on excessive investment caused by political connection.It provide a new theoretical basis to improve the listed company investment decision and its governance structure.