Open AccessResearch on Property Rights, Revenue Transparency and Equity Financing Costs——Based on the Perspective of CEO Overconfidence
Author(s) -
Jun Luo
Publication year - 2019
Publication title -
journal of business administration research
Language(s) - English
Resource type - Journals
ISSN - 2630-5194
DOI - 10.30564/jbar.v1i1.454
Subject(s) - overconfidence effect , equity financing , business , finance , equity (law) , cost of equity , property rights , revenue , accounting , economics , cost of capital , microeconomics , profit (economics) , psychology , social psychology , debt , political science , law
[Abstract] This paper takes the Chinese listed company with the equity refinancing qualification from 2012 to 2013 as the research object, and uses the residual revenue model to calculate the equity financing cost. This paper discusses the impact of the overconfidence of executives on the equity financing cost and its impact mechanism. The unique institutional background examines the differences in property rights characteristics. The research found that: (1) executive overconfidence has a negative impact on the cost of equity financing, executives tend to be overconfident, the higher the equity financing cost of the company; (2) the overconfidence of executives to state-owned enterprises compared to private enterprises The negative impact of financing costs is more significant; (3) in addition, this paper also examines the potential impact mechanism of executive overconfidence on the cost of equity financing. The quality of information disclosure and the risk of investor prediction have a mediating effect on the impact of executive overconfidence on equity financing costs.