Research On Managerial Overconfidence,Internal Control And Corporate Debt Financing

Since Modigliani and Miller put forward the famous MM theorem,the financing decisions of enterprises have become the focus of scholars.Scholars use different theories to analyze and study the financing decisions of enterprises,but most studies start from the basic assumption that managers are completely rational.The research of behavioral economics shows that the irrational behavior of overconfidence is widespread in people in the real society.Therefore,this paper gives up the hypothesis of rational managers and discusses how managers' overconfidence affects the debt financing level of enterprises from the perspective of irrationality.In this paper,combining economics and psychology,when analyzing the influence of managers' irrational mentality of overconfidence on the debt financing level of enterprises,the internal control of factors is added as the regulating variable,and the property right nature suitable for the national conditions is taken into account.Through theoretical analysis and empirical test,this paper discusses the interaction between corporate debt financing level,internal control and overconfidence of managers,summarizes and sorts out the three hypotheses proposed by predecessors and verifies the correctness of the hypotheses through empirical analysis.This paper choose the Shanghai and shenzhen a-share listed company's data from 2013 to 2017,takes the asset-liability ratio as the substitute variable for the level of corporate debt financing,and takes the managers' relative compensation and the increase of managers' shareholding as the substitute variable for overconfidence,and determines the quality of corporate internal control through the internal control index in the internal control database of dubo.After screening and processing a large number of data,we obtained 4,575 samples,including 712 overconfidence data and 3,863 non-overconfidence data.The software SPSS25.0 was used for regression analysis of the processed data,and three conclusions were proposed according to the empirical results:(1)compared with rational managers,enterprises have higher debt financing level when managers are overconfident.(2)the improvement of the internal control quality of the moderator variable will weaken the influence of managers'overconfidence on the debt financing level of enterprises,and to some extent restrain the irrational behavior of overconfidence.(3)compared with state-owned enterprises,high-quality internal control of non-state-owned enterprises significantly weakens the relationship between overconfidence and enterprise financing level,so internal control has a more significant regulating effect in non-state-owned enterprises.Based on behavioral economics,this paper discusses managers overconfidence and corporate debt financing level,the relationship among the innovative joined the internal control the regulating variable,widened the research perspective of corporate debt financing,offers a new direction for corporate governance at the same time,to help enterprises better understand managers overconfidence this irrational behavior and reasonable use,establish scientific and reasonable financing decision process.