The Impact Of CEO Overconfidence On Corporate Social Responsibility

Along with the need of rapid economic development to high quality development,the practical circles and the academia have become more and more aware of the importance of actively performing corporate social responsibility.According to the advanced theory and modern psychology,overconfidence will have a certain biased impact on the fulfillment of corporate social responsibility.However,current research conclusions on managers’ overconfidence and corporate social responsibility are completely opposite,lack of discussion on the individual level of CEO,lack of good theoretical mechanism to explain the opposite conclusion,and lack of discussion on the relationship between the two will eventually bring economic consequences to the enterprise.On this basis,this study further studies the relationship between CEO overconfidence and corporate social responsibility from the perspective of butler theory,and tries to introduce external conditions such as analyst’s attention to discuss the possibility of transforming the relationship to agency relationship,as well as its economic consequences.In this study,literature and theories related to social responsibility,overconfidence,analyst attention,and financing constraints were reviewed,including three aspects:First,the impact of CEO overconfidence on corporate social responsibility was studied,and discussed in terms of property rights,industry and regional heterogeneity,and specific dimensions of social responsibility.Secondly,two moderating variables,analyst attention and financing constraint,are introduced to study whether they will cause the change of the relationship between CEO overconfidence and CSR.Finally,the economic consequences of the relationship between CEO overconfidence and corporate social responsibility,namely the impact on corporate value,are further discussed.Based on the data of Shanghai and Shenzhen A-share listed companies from 2010 to 2020,the empirical study found that:(1)CEO overconfidence has A positive impact on CSR,and will show differences in different dimensions of social responsibility.In non-state-owned enterprises,the positive correlation between the two is stronger,while in the manufacturing industry,the positive correlation between the two is weaker.(2)Analyst attention and financing constraints will weaken the positive relationship between them,which verifies the transformation mechanism of butler theory and agency theory.(3)Further analysis of economic consequences found that CEO overconfidence positively affected corporate social responsibility and corporate value.Based on the butler theory,this study explains the positive relationship between CEO overconfidence and corporate social responsibility,and introduces the external perspective such as analyst attention to explain the possibility of agency problems in the relationship between the two,gives some consideration to the previous opposite conclusions,and finally extends the analysis of the positive economic consequences brought by the relationship between the two from the perspective of reality.According to the research conclusion,combined with the actual situation,it puts forward some concrete policy suggestions for corporate governance,and also summarizes the shortcomings of this research.Finally,it provides more explicit and targeted suggestions for corporate governance,promotes the fulfillment of corporate social responsibility,and enhances the ability of sustainable development of enterprises.