Research On The Influence Of Managerial Confidence And Managerial Power On Investment Efficiency

As an important way of corporate capital appreciation,investment activities not only affect the value of enterprises but also the sustainable development of the national economy.In recent years,the state has proposed a supply-side reform policy to promote the transformation and upgrading of the national economy and to improve the efficiency of resource allocation.Therefore,how to improve the efficiency of investment has once again been put under the spotlight.As the managers of the company and the dominator of the resources,their thoughts and behaviors have a direct and significant impact on the investment decisions of the company.Based on this,this paper taking the personal characteristics of the management as the starting point,studies the influence of managerial confidence and managerial power on investment efficiency,and further explores how they affect the investment efficiency.Therefore,this paper takes the 2010-2017 Shenzhen-Shanghai A-share listed companies as the research sample,adopts the method of multiple regression,and uses free cash flow as the research perspective,to empirically study the relationship between management over-confidence,management power,and investment efficiency.First,under the full sample,we studied(1)the impact of managerial confidence on investment efficiency;(2)the impact of managerial power on investment efficiency;(3)and the regulatory effect of managerial power on management confidence and investment efficiency,and further tested the synergy effect of management confidence and management power on investment efficiency.Building on the fact that the sample is divided into such different operating conditions as free cash flow and shortage and taking the free cash flow as the research perspective,an empirical test to study the difference of the full sample will be conducted using comparative analysis through group regression.Finally,based on the research of(1)and(2),In order to deeply analyze the impact of management confidence and management power on investment efficiency,this paper further studies the difference of different levels of management confidence and different levels of managerial power on investmentefficiency.The results show that:(1)In the full sample,Managerial confidence significantly increases the over-investment of the company and alleviates the lack of investment.Moreover,when company's free cash flow is rich,the over-confidence of managerial is more significant to increase over-investment of the company.At the same time,in the regression of the three groups,the difference of the impact of managerial confidence on underinvestment is not obvious.(2)In the full sample,Managerial power significantly increased the over-investment of the company and eased the investment shortage of the company,similar to the relationship between managerial confidence and investment efficiency,when free cash flow is rich,the intensification effect of managerial power on corporate over-investment is also more significant.When free cash flow is short,the impact of managerial power on underinvestment is almost indistinguishable from the full sample.(3)In the full sample,managerial power has a tendency to exacerbate over-investment caused by managerial confidence,and the results are not significant.However,managerial power has significantly strengthened the mitigation effect of managerial confidence on under-investment,and managerial over-confidence and managerial power has a synergistic effect on corporate investment.Relative to the full sample,when the company's free cash flow is rich,the synergistic effect of managerial overconfident,managerial power on over-investment is more significant,and at the same time,when the company's free cash flow is short,the synergistic effect of managerial under-confident,managerial power on over-investment is also more significant.(4)The low level of managerial confidence has significantly eased the over-investment of the company.At the same time,only when the management has high confidence,it will significantly increase the over-investment of the company and alleviate the under-investment of the company.(5)The medium-sized managerial power significantly increased the over-investment of the company and eased the under-investment of the company.Compared to medium-sized managerial power,higher managerial power more significantly exacerbates over-investment,and at the same time,unlike the full sample regression results,when management has greater power,it will exacerbate thecompany's under-investment.This paper examines the impact mechanism of management's personal characteristics on investment efficiency,and provides theoretical basis and policy recommendations for companies to improve investment efficiency from the perspective of management's personal characteristics and corporate governance.