| Investment is an important tool for the country to drive economic development.In recent years,the Chinese government has taken many measures to promote high-quality economic development and improve the quality of investment.In January 2017,the SASAC issued the Measures for the Supervision and Administration of Investment in Central Enterprises to continuously strengthen the supervision of state-owned capital;In December 2019,the State Council issued the Notice on Strengthening the Capital Management of Fixed Assets Investment Projects,which strengthened the management of capital of investment projects.Investment is also an important activity for enterprises to realize cash inflow and asset appreciation,but there is a widespread phenomenon of inefficient investment in China’s listed companies.As the decision-maker of enterprises,managers influence the investment activities of enterprises.Behavioral finance believes that managers are not completely rational and will make wrong decisions under the influence of emotions,past experiences and other factors.Managers’ overconfidence is one of the irrational behaviors.In addition,financial flexibility is an enterprise’s financial redundant resources,and the reserve of financial flexibility will also affect the investment decisions of managers.This thesis studies the influence of managers’ overconfidence on the investment efficiency of enterprises,and tests the intermediary effect of financial flexibility.The thesis reviews the literature related to managers’ overconfidence,financial flexibility and investment efficiency,demonstrates and proposes research hypotheses based on behavioral finance theory,high-level echelon theory,financing constraint theory and free cash flow hypothesis.In the empirical research part,the thesis collected the data of listed companies on the main board of Shanghai and Shenzhen from 2017 to 2021,used EXCEL and STATA software for data processing,and used multiple regression analysis to study the relationship between managers’ overconfidence,financial flexibility and enterprise investment efficiency.The research finds that:(1)there is a significant positive correlation between managers’ overconfidence and enterprises’ inefficient investment,and managers’ overconfidence will lead to enterprises’ inefficient investment;(2)There is a significant positive correlation between managers’ overconfidence and cash flexibility,that is,overconfidence managers will improve cash flexibility;(3)There is a significant negative correlation between overconfidence of managers and debt flexibility,that is,overconfidence of managers will reduce debt flexibility;(4)Based on the intermediary effect model,it is identified that the emergence of financial flexibility and debt flexibility have intermediary effects on managers’ overconfidence and enterprise investment efficiency.The thesis analyzes the robustness by replacing the overconfidence variable of managers and the investment efficiency variable of enterprises;The lag phase I explanatory variable is selected as the instrumental variable for endogenous analysis,and the research conclusions have not changed.The thesis further discusses the intermediary effect of financial flexibility in enterprises with different property rights by samples.In view of the above conclusions,the thesis puts forward suggestions to improve the inefficient investment of enterprises,including improving the appointment and assessment mechanism of managers;Establish a scientific project decision-making system to promote scientific and reasonable decision-making of enterprises;Reserve appropriate financial flexibility to improve the ability of enterprises to cope with risks. |
