Managers' Overconfidence,internal Control And Dynamic Adjustment Of Capital Structure

Capital structure is an important premise and foundation for enterprises to realize value maximization.A reasonable capital structure can help enterprises to establish a corporate governance mechanism with clear rights and responsibilities and scientific management,promote enterprises to strengthen internal management and internal control,stimulate internal power and vitality of enterprises,and maximize enterprise value.According to the theory of dynamic capital structure,an enterprise will determine an optimal capital structure.The optimal capital structure needs to be gradually formed in the long-term sustainable development of the company.It is not achieved overnight in each adjustment and change.Each adjustment of capital institutions will produce adjustment costs,and each adjustment will continue to approach the target capital structure.With the deepening of behavioral economics research,some scholars begin to realize that some irrational psychological factors of enterprise managers may have an impact on corporate investment and financing decisions.The senior management of the company has control over the relevant financial decisions,which will have an impact on dynamic adjustment of capital structure.In fact,because every manager is a unique individual,their confidence level will be different,different managers will have different investment and financing preferences,and different considerations of risk,so the speed of dynamic adjustment of the company's capital structure will be affected.Therefore,it is an important and urgent research direction to study how the overconfidence of managers will affect the speed of capital structure adjustment.This paper mainly discusses whether overconfidence of managers will slow down capital structure adjustment.On this basis,the paper introduces the variable of internal control to study the regulatory effect of internal control quality on managers' overconfidence and the adjustment speed of capital structure.This study finds that high-quality internal control can effectively control the behavior caused by the psychological factor of managers' overconfidence,and can effectively solve the principal-agent contradiction.This article is divided into six chapters.The first chapter is an introduction,briefly introducing the research significance and background of the research,as well as the research methods,content and innovation of this article.The chapter 2 is the literature review of this paper,which respectively collates the domestic and foreign related literature on three variables: Managers' overconfidence,internal control and the speed of dynamic adjustment of capital structure.The third chapter introduces the theoretical overview and theoretical basis of this paper,including the definition of the basic concepts of the three main variables in this paper,and introduces the theoretical basis of this study.The fourth chapter is theoretical analysis and hypothesis.Based on the data of all A-share listed companies in China from 2009 to 2017,this paper uses the empirical research method of fixed effect to explore the impact of managers' overconfidence on the speed of dynamic adjustment of capital structure,tests the regulatory effect of internal control on the above relationship.The fifth chapter is the empirical test results analysis.This chapter mainly includes correlation analysis,descriptive statistical analysis,robustness test and multiple regression analysis.In the further analysis,the property right factors are added to the research results.The sixth chapter is the conclusion of this paper and the related policy suggestions.According to the conclusion of the paper,some suggestions are given: first,to build a reasonable salary incentive mechanism for managers;second,to build a dynamic optimization system for the capital structure of enterprises;third,to improve the design of internal control system;fourth,to increase government intervention and optimize market allocation.The results show that: first,managers' overconfidence is negatively correlated with the speed of capital structure adjustment.It shows that the judgment and decision-making of managers,as the helmsman of the development direction of enterprises,will affect the speed of capital structure adjustment.Second,internal control can effectively inhibit the relationship between managers' overconfidence and the speed of dynamic adjustment of capital structure.It shows that internal control can improve corporate governance,restrain the decision-making behavior of management,and play a positive role in the speed of dynamic adjustment of corporate capital structure.The main innovations of this paper are as follows: 1.The research perspective is different from the past.This paper starts from the perspective of managers' overconfidence,and discusses the regulatory effect of internal control,that is,the moderating effect of internal control on the relationship between managers' overconfidence and the speed of capital structure adjustment.2.The research content is different from the past.This paper not only studies how the overconfidence of managers affects the adjustment speed of capital structure from a dynamic point of view,but also adds internal control as a regulating variable,deepens the research and discusses how the overconfidence of managers of state-owned enterprises and private enterprises affects the adjustment speed by classification,which is a new attempt in the research content.3.The conclusion of the study is different from the past.The empirical test of this paper draws a different conclusion from the past,that is,internal control can inhibit the negative correlation between managers' overconfidence and the speed of capital structure adjustment.