The decision of investment and financial influenced by executives with overseas values: Based on individualism - overconfidence

ABSTRACT

This article selects companies listed on stock exchanges in Shanghai and Shenzhen from 2011 to 2018 as samples and manually collects the overseas experience data of the executives of the sample companies to examine the influence of executives with overseas experience on the company’s financial and investment decisions. This study shows that companies with the characteristics of executives with overseas experience make more investments, conduct more mergers and acquisitions, have higher debt ratios, and have more short-term debt. This is related to the fact that executives with overseas experience are more likely to show overconfidence than local executives. From the research point of view, the influence of executives with overseas experience who have both work and study experience ranks first. Compared with the separation of chairman and CEO, executives with overseas experience with dual identities are of great significance to financial and investment decisions. executives with overseas experience have more influence on private companies’ financial and investment decisions than state-owned companies. The conclusion of this article highlights the importance of human capital and high-level characteristics to enterprise management and helps to provide a reference for Chinese enterprises in introducing overseas talents.

KEYWORDS:

• Executives
• overseas experience
• financial affairs
• investment
• upper echelons theory

JEL CLASSIFICATION:

• G11

Disclosure statement

No potential conflict of interest was reported by the author(s).