Research On The Influence Of Investor's Sentiment On The Investment Of Small And Medium-Sized Enterprise

Based on the assumption of complete rationality,previous scholars have summed up a series of traditional financial theories.However,with the emergence of some anomalies that cannot be explained by traditional theories in the financial market,people gradually realized that there is an inexplicable force subjectively affecting the financial market which can be summarized as the psychological factor of human beings.Investor Sentiment is one of the important subjects in the research field of Behavioral Finance.In recent years,more and more scholars have begun to study the relationship between investor sentiment and some phenomena in the financial market.The scale of the Small and Medium Board Market has been expanding since its birth in 2004.However,for the SME Board Market has not been mature yet,it can be easily affected by various factors,among which the Investor Sentiment is an important part.Therefore,based on the previous studies,this paper explores the relationship between the Investor Sentiment and the enterprise investment in the SME Board Market to provides some theoretical and practical references for the SME Board Market enterprises in investment decisions.Different from previous studies,this paper chooses a more comprehensive principal component analysis method to construct the Investor Sentiment's index.At the same time,this method narrows the research object to the Small and Medium Board Market.First of all,this paper expounds the theories related to Investor Sentiment,including the reasons for its birth,its concept,its performance in economic activities and the way to its measurement.Secondly,this paper analyzes the enterprise investment and relevant theories.Next,it analyzes the investor sentiment in China and the status quo of investment in small and medium-sized enterprises.Finally,this paper analyzes the three channels of Investor Sentiment affecting enterprise investment,which respectively are equity financing channels,catering channels and credit channels.This paper,on the basis of theoretical research,empirically studies three aspects by constructing the econometric model.Firstly,the author draws on the construction method of CICSI,based on five single indications which are closed-end fund discount rate,market turnover rate,new increasing number of investor account opening,the market price-earnings ratio and the investor's confidence index,and then constructs the annual Investor Sentiment Index for the study period through principal component analysis.Secondly,this paper establishes a relationship model between Investor Sentiment and the investment level of Small and Medium Enterprises.The empirical results show that Investor Sentiment has a positive impact on the investment level of Small and Medium Enterprises,which means high investor sentiment can increase the investment level of Small and Medium Enterprises and conversely depressed investor sentiment can reduce the investment level of Small and Medium Enterprises.Thirdly,based on the Richardson model,the model of underinvestment and over-investment of Small and Medium Enterprises is constructed.Meanwhile,taking the results of the Richardson model as interpreted variable and Investor Sentiment as the explanatory variable,the author studies the relationship between Investor Sentiment and under-investment as well as over-investment of Small and Medium Enterprises.The result founds that Investor Sentiment has a positive correlation with the over-investment of Small and Medium Board Enterprises and a negative correlation with under-investment of Small and Medium Board Enterprises.In conclusion,this paper separately puts forward suggestions from the perspective of investors,managements of companies and the government,in the hope that the investment efficiency of the enterprises in the SME Board Market can be improved in the future to facilitate the development of the whole market.