The Study on the Characteristic of Board Chairman, Overconfidence and Financial Decisions

Based on the theories of Upper Echelons and Irrational Mental, this article does research in the characteristics of board chairman and overconfidence; as well as the relationship about overconfidence and financing decisions. This article chooses samples from 2009 to 2011. We discover that the characteristics of board chairman are strongly related to overconfidence; overconfidence has significant correlation with investment decisions. In debt financing decisions, overconfidence is strongly correlated to debt financing decisions. In term financing decisions, the business tends to choose short-term debt. On the basis of overconfidence, this article makes suggestions about building financial accountability mechanism, internal control mechanism, reasonable organization restrict framework