Enterprise Life Cycle Managerial Overconfidence and Capital Structure

The research tries to investigate the relationship among firm life cycle, managerial overconfidence and capital structure. Making listed companies in China as sample, shareholding owned by manager and its variation as a proxy for the overconfidence, and company listing age as a substitute of corporate life cycle, using OLS and panel data analysis method, we make an empirical analysis on the relationship among firm life cycle, managerial overconfidence and debt ratio. Research results show that the more overconfident the manager is, the higher the firm use debt, but in different stages of development, the impact of managerial overconfidence on debt is not the same. In the stage of growth, managerial overconfidence have great influence on debt levels; In mature stage, the impact of managerial overconfidence on debt levels declines; In the stage of recession, the influence of managerial overconfidence on debt level is insignificant.