Research On The Influence Of Managers’ Overconfidence On Corporate Capital Structure

The capital structure of enterprises has always been a hot topic for scholars.Under the premise that the subject of the enterprise is objective and rational,scholars constantly improve and perfect the theory of capital structure,With the continuous development of the times,after some scholarst’exploration,they found that the premise of setting"rationality"is not reasonable.The decision of the subject will be interfered by external things,and will also be affected by psych ological or emotional factors,They always have irrational behaviors.In the enterprise,managers,as the core of enterprise decision-making,determine the development direction of enterprises,investment and financing decisions,and play a major role in the choice of capital structure.Different managers have different qualities.Although they have a good understanding of the company’s situation and have rich management experience,the decisions they make are not necessarily completely rational,and they may overestimate their ability and be overconfident.It is biased to study managers based on "rationality." After reviewing the research results of scholars,this paper also believes that managers’ overconfidence will have an impact on the capital structure of enterprises.Through the reading of a large number of documents,it is found that there is still a need for further research in this field.Therefore,this paper studies the mechanism of the influence of managerial overconfidence on the capital structure of enterprises.After carefully studying the relevant theories and literature,this paper starts a more in-depth study,focusing on the discussion of the impact mechanism.This paper uses AMOS21.0 to construct a conceptual model of the influence of managerial overconfidence on capital structure,and proposes three hypotheses to explore the existence of relevant impact paths.It is assumed that managers’ overconfidence can influence the choice and change of corporate capital structure through risk appetite,stock repurchase and cash flow.The cdata of China’s A-share listed companies in 2017 is taken as the research object.Based on the measurement software processing,the empirical analysis is carried out.Finally,the rationality of the hypothesis is verified and the following research conclusions are obtained.Studies have of the hypothesis is verified and the following research conclusions are obtained.Studies have shown that managers’ overconfidence affects the capital structure of listed companies through three intermediary variables:risk appetite,stock repurchase,and cash flow.In addition,the indirect influence of managers’overconfidence on the capital structure of listed companies is stronger than the direct impact.Then,this paper selects Gree Electric as the case analysis object to illustrate the influence of manager’s overconfidence on the capital structure of listed companies,and proposes to enhance the manager’s self-cognitive ability,establish a scientific management evaluation system,and enhance the cash flow.Suggestions for improving the capital structure by monitoring and improving the corporate governance system.Finally,look forward to future research.