Manager's Overconfidence,accounting Conservatism And Investment Efficiency

Investment is the foundation of enterprise management and development,which runs through the development of enterprises,but the problem of non-efficient investment is prevalent in enterprises,and how to solve the phenomenon of non-efficient investment has become a hot research topic.The investment decision of an enterprise needs the management to decide,and the manager as a limited rational person is influenced by his own habits and psychological factors,and will make the investment decision different for its own psychological reasons.Accounting conservatism,also known as prudence,can effectively reduce the degree of information asymmetry due to its accounting recognition standards,so that external investors can get more favorable information,invest in the best projects,and have a certain effect on non-efficient investment.At present,most studies directly analyze the relationship between managers' overconfidence and investment efficiency,Accounting conservatism and investment efficiency directly from a static perspective,and less on the influence of dynamic Accounting conservatism on the relationship between the two.Therefore,this paper mainly studies the relationship between managers' overconfidence and the efficiency of enterprise investment,and whether accounting conservatism has an intermediary effect on both,and further analyzes the different stages of life cycle,and interprets the motivation and influencing factors of non-efficient investment.This paper takes the data of A-share listed companies in Shanghai and Shenzhen from 2015 to 2018 as a research sample for the relevant empirical analysis.The following conclusions are drawn:(1)In the whole sample,managers' overconfidence will exacerbate overinvestment and curb underinvestment.A sound accounting policy can effectively curb overinvestment and exacerbate underinvestment.Accounting conservatism can alleviate the problem of non-efficient investment caused by managers' overconfidence.(2)At different stages of life cycle,managers' overconfidence gradually weakens with the development of the enterprise life cycle stage.In the long-term and mature period,the over-confidence of managers significantly aggravates the overinvestment and inhibits underinvestment.Accounting conservatism has different effects on the investment efficiency of enterprises at different stages of life cycle,Accounting conservatism significantly aggravates the underinvestment and suppresses overinvestment during the recession period,and the fiscal robustness has the greatest inhibition effect on overinvestment and the effect on underinvestment.(3)In the long-term and mature period,the steady performance of enterprise accounting alleviates the non-efficient investment caused by managers' over-confidence,and during the recession,the firmness of enterprise accounting has a dampening effect on the overconfident and non-efficient investment of managers.In view of the above empirical results,the paper puts forward the corresponding policy recommendations in the last part.