The Impact Of Corporate Managers’ Overconfidence On Stock Price Crash Risk

The report of the 20 th National Congress of the Communist Party of China pointed out that it is necessary to strengthen and improve modern financial supervision,strengthen the financial stability guarantee system,and include all kinds of financial activities in supervision in accordance with the law to prevent and resolve financial risks.As a "barometer" of the national economy,the stock market is an indispensable part of the capital market,reflecting not only people’s expectations for the future,but also confidence.It is of special significance to China’s economic development to improve the endogenous stability mechanism of the capital market,maintain the stable development of the stock market,and prevent the risk of stock price crash.As the leader of the company’s strategic development,managers’ behavioral decisions will inevitably affect the company’s development.From the perspective of managers of listed companies,this paper studies whether managers’ overconfidence is related to the risk of future company stock price crash,and how does it affect it.Therefore,this paper adopts the methods of theoretical analysis and empirical analysis,takes the A-share non-financial listed companies in Shanghai and Shenzhen in China from 2010 to 2020 as the research object,analyzes the impact of manager overconfidence on the future stock price crash risk of enterprises based on the theory of manager overconfidence,information asymmetry theory and high-level echelon theory,and then analyzes the role path of manager overconfidence on stock price crash risk.The mediating variable,over-investment,is introduced to explore the internal mechanism of the impact of managers’ overconfidence on stock price crash risk,and relevant research hypotheses are put forward.Finally,the multiple regression empirical method is used to construct the multiple regression mediating effect model,and the previous research hypothesis is demonstrated.Based on theoretical analysis and empirical results,this paper concludes that first,management overconfidence aggravates the risk of stock price crash of listed companies,and management overconfidence is positively correlated with the risk of future stock price collapse.Second,managers overconfident will increase the level of corporate investment,leading to over-investment;Third,over-investment has a mediating effect between managers’ overconfidence and the risk of stock price crash.On this basis,this paper puts forward the following suggestions from the perspective of preventing the risk of corporate stock price crash: first,pay attention to managers’ overconfidence;Second,improve the internal investment decision-making system;Third,strengthen the information disclosure of listed companies.