The Characteristics Of Executive Team And Overinvestment

The problem of overinvestment is one of the most important concerns of the academic and practical circles at present,whether from the point of view of enterprises or the market,overinvestment is not only not conducive to the long-term development of enterprises and markets,but also increases the instability in the market.Therefore,the "governance" of overinvestment is particularly important.For the problem of overinvestment of enterprises,the current research is based on the rational assumption of managers,but in reality,managers are often irrational,the upper echelons theory break through the limitations that previous research only focus on the individual of managers,At the same time,it based on the irrational angle of managers and provided an idea for studying the relationship between the characteristics of top management team and overinvestment.For the factors that lead to overinvestment,from the top management team itself,its overconfident psychology provides a motive for the enterprise's overinvestment,and from the perspective of the external market environment,with the development and perfection of the capital market,the phenomenon of corporate financialization is constantly highlighted,and some studies have shown that the “reservoir effect” of corporate financialization on real investment will lead enterprises to over-invest,it can be said that corporate financialization provides a means for enterprises' overinvestment.The current research is not sufficient in the intermediary effect between the characteristics of the top management team and the overinvestment,so this thesis will discuss the influence mechanism between the characteristics of the top management team and overinvestment based on the upper echelon theory,and study the transmission path of the characteristics top management team-overconfidence-overinvestment and the characteristics of top management team-corporate financialization-overinvestment.This thesis' conclusion have important theoretical and practical significance.On the basis of combing the literature at home and abroad,this thesis uses the upper echelon theory,behavioral finance theory,behaiorial integration theory of top management team and preventine savings theory,and follows the research line of "theoretical analysis-empirical analysis-conclusion" by the method of combining normative analysis with empirical analysis,to study the topics in two ways:(1)Whichcharacteristics of top management team are indicative of overconfidence? Is there an intermediary effect between the characteristics of top management team and overinvestment?(2)What is the effection of corporate financialization on overinvestment? Does corporate financialization have an intermediary effect between the characteristics of top management team and overinvestment?In view of the above problems,this thesis takes the 2013-2018 years of China's A-share listed companies as a sample of research,the conclusion is:(1)the average age(reverse),the male ratio(positive),the average level of education(positive),The average tenure(reverse),gender heterogeneity(positive)and educational heterogeneity(reverse)all significantly affect managers' overconfidence,these six characteristics have indicative effect on the managers' overconfidence,and overconfidence is a complete intermediary variable between male ratio and overinvestment level,at the same time,it's a partial intermediary variable between average age,average tenure,gender heterogeneity and overinvestment level.(2)the financialization of enterprises has a inhibitory effect on the overinvestment level in the current period,which will exert a "crowding-out effect",but it will aggravate the level of overinvestment in the next period,and the "reservoir effect" will increase the lever of overinvestment in the next period of enterprises.Corporate financialization is a partial intermediary variable between the average age,average tenure,age heterogeneity and overinvestment,at the same time it's a complete intermediary variable between the male ratio and overinvestment.(3)Overconfidence and corporate financialization both play a full intermediary effect between the male ratio and overinvestment,which may be a complex chain transfer mechanism between the male ratio and overinvestment.Based on the theory and empirical analysis of this thesis,the characteristics of top management team will affect the investment behavior of enterprises by influencing the over-confident psychology of managers and the financialization of enterprises.At last,it is of great significance for enterprises to improve investment efficiency and build a safe and stable investment environment by provide suggestions from optimizing the construction of top management team,improving internal communication mechanism,overinvestment's multi-dimension management and rational treatment on financialization of enterprises.