Author(s)

Chunhong Qian

Corresponding Author

Chunhong Qian

ABSTRACT

From the perspective of behavioral finance, this paper analyzes the relationship between managerial overconfidence and over-investment, and compares the influence of different ownership concentration and shareholder nature on the relationship between them. It selects the China’s manufacturing listed companies as research sample from 2013 to 2017 year. The research shows that managerial overconfidence and over-investment are significant positive correlation, the overconfidence of managers will aggravate the over-investment. Compared with companies with low ownership concentration, high ownership concentration can reduce the over-investment caused by managerial overconfidence. Meanwhile, compared with the non-state-owned holding companies, state-owned holding companies can lead to more over-investment caused by managerial overconfidence.

KEYWORDS

Managerial Overconfidence, Over-Investment, Ownership Concentration