INNOVATION R&D, OVERCONFIDENCE AND CORPORATE PERFORMANCE OF GEM LISTED COMPANIES

Liu Lan, Zhang Xinyao, Shen Ying

ABSTRACT: Based on modern housekeeper theory, innovation theory and endogenous variable theory, this paper takes 468 GEM listed companies during 2012-2015 as research samples, and adopts multiple linear regression model to analyze the relationship between managers’ overconfidence, innovation input and corporate performance. The empirical results show that: (1) manager’s overconfidence affects enterprise’s investment decision-making, overconfident managers tend to invest in innovation. (2) Manager’s overconfidence and innovation investment have a significant interaction. (3) There is a negative correlation between manager’s overconfidence and corporate performance. (4) Enterprise innovation input and corporate performance show a U-type relationship, as when the enterprise innovation input reaches a certain point, enterprise innovation input will no longer bring great performance promotion to the enterprise.

Keywords: Innovation R&D, Overconfidence, Corporate Performance.