Empirical Research on Managerial Overconfidence and Corporate Financing Behavior of Pecking-order

摘要

This paper test whether managerial overconfidence is associated with corporate financing policies, it propose that managerial beliefs help to explain the remaining variation across and within firms, including variation in pecking-order behavior. Developing a proxy for managerial overconfident mainly based on the manager being board chairman as CEO and using the modified pecking order model of financing, making an empirical test the behavior of pecking order financing with overconfident manager using the panel data of Dow Jones China 88 Index companies at September 2008 from 2000 to 2007, the results show that managerial overconfident is an important managerial characteristics determinant of financing decision, the overconfident manager prefer internal over external financing and they prefer debt over equity financing. Keywords —Board chairman as CEO; Empirical study;Managerial overconfidence; Pecking order financing