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认知的桎梏：从稳定型财务业绩到企业过度投资 ——基于中国上市公司的证据
[Cognitive shackles: from Consistency of financial performance to Corporate Over-investment ——Evidence-based China Listed Companies]

Author

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  • Zhong, Ma

Abstract

Compare with the rate of development of human society , human biological evolution and behavioral pattern change very slowly ,thus human has to use “raw” cognitive pattern which cause bias to process modern information. To study the problem of Corporate Over-investment based on Heuristic Theory , this paper based on the behavior perspective. Based on Richandson (2006) model , using 2001 to 2012 data of China listed companies , we find that : when company shows consistency of high financial performance ( 1 ) due to the Self-attribution Bias, the level of confidence will increase, then exacerbate over-investment ; ( 2 ) due to Representative Bias and Conservatism Bias, causing the decision-making process related to information processing bias, over-investment will be intensified ; ( 3 ) based on the use of executive compensation and corporate risk levels to measure overconfidence , overconfidence will aggravate this distortion .

Suggested Citation

  • Zhong, Ma, 2014. "认知的桎梏：从稳定型财务业绩到企业过度投资 ——基于中国上市公司的证据 [Cognitive shackles: from Consistency of financial performance to Corporate Over-investment ——Evidence-based China Listed Companies]," MPRA Paper 55476, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:55476
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    References listed on IDEAS

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    More about this item

    Keywords

    consistency of financial performance information; cognitive bias; Heuristic; overconfidence; managers confidence; inefficient investment; overinvestment;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • G3 - Financial Economics - - Corporate Finance and Governance

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