Abstract
Corporate investment behavior has always been a matter of great concern. It is the main force for corporate growth and basis for future cash flow growth. Investment will directly affect the profitability and operational risks of enterprises, and will also affect financing and dividend distribution and series of corporate financial policies. However, there is always a large number of under-investment or over-investment behavior in enterprises in reality, which is also called the non-efficiency investment by enterprises. In addition to macro factors, the behavior and psychological deviation of manager also has an impact on corporate investment behavior. From the perspective of behavioral finance, this paper draws on the phenomenon of psychological deviation of people’s overconfidence in psychology, and measures the overconfidence of managers in 2015-2017. The impact of behavior on corporate investment efficiency attempts to provide theoretical explanations and empirical evidence for the phenomenon of non-efficiency investment.
Highlights
Investment decision-making activities have always been one of the most important activities in the daily operation of enterprises, and economics and management scholars have included it in the research of important topics
Behavioral finance theory absorbs a lot of knowledge of modern psychology, and explains the abnormal phenomenon of financial participants when they make investment decisions from the perspective of psychology
In order to explore the relationship between self-serving attribution of manager and enterprises’ non-efficiency investment, this paper first summarizes and proposes the measurement method based on the psychological basis and behavioral finance theory: draw on Richardson’s investment expectation model and use regression residual as a measure of the degree of enterprises’ non-efficiency investment
Summary
Investment decision-making activities have always been one of the most important activities in the daily operation of enterprises, and economics and management scholars have included it in the research of important topics. Overinvestment is a waste of resources, and will suffer the interests of investors and enterprise In view of such prominent problems in listed companies, scholars began to conduct extensive research. The irrational behavior of managers usually damages enterprise value and restricts the existence and development of listed companies theoretically. Because managers have the psychological characteristics of cognitive deviation, they cannot accurately carry out self-evaluation, and it is difficult for them to achieve the effect by taking incentive measures. This shows that the inefficient investment of governance managers should start from the cognitive characteristics of decision makers. Whether we can use foreign research methods to study the listed companies in China is worth discussing
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