With the rise of behavioral finance, many studies have gradually begun to focus on the influence of investors' and managers' irrational psychology in corporate finance, such as the influence of managers' overconfidence on corporate investment, and such as investors' herd mentality in the capital market, which lead them to make investment decisions that deviate from the theoretically optimal ones, thus leading to inefficient investment behavior. In this paper, 395 A-share listed companies are selected as the research objects and the research years are from 2015 to 2020, and investor sentiment, managerial optimism and corporate investment behavior are included in the same framework to explore the relationship between these three and what role managerial optimism has in the relationship between investor sentiment and corporate investment behavior, and the study finds that both investor sentiment and managerial optimism have a positive effect on corporate. The study finds that both investor sentiment and managerial optimism have positive effects on firms' investment behavior; investor sentiment and managerial optimism are negatively related; and managerial optimism plays the role of masking effect in the process of investor sentiment affecting firms' investment behavior.

Kefan Jiang. Investor Sentiment and Corporate Investment Behavior——Based on the Suppressing Effect of Managers Optimism. Academic Journal of Business & Management (2022) Vol. 4, Issue 8: 98-104. https://doi.org/10.25236/AJBM.2022.040815.

[1] Baker, M., et al. “When Does the Market Matter? Stock Prices and the Investment of Equity-Dependent Firms.” The Quarterly Journal of Economics, vol. 118, no. 3, 2003, pp. 969–1005. 

[2] Hua, Guiru, Liu, Zhiyuan, Xu, Qian. Investor sentiment, managerial optimism and corporate investment behavior[J]. Financial Research, 2011(09):178-191. 

[3] Lu, Ping, Leng, Jun. Investor sentiment and surplus management-an empirical study based on accrual surplus management and real surplus management[J]. Research on Finance and Economics, 2017(02):88-96.

[4] Ma Qiang, Zhang Zhongyuan. Banking and securities transfers, stock market returns and investor sentiment[J]. Journal of Yunnan University of Finance and Economics, 2016,32(04):114-123. 

[5] Wen Zhonglin, Ye Baojuan. Mediation effect analysis: Methods and model development[J]. Advances in Psychological Science, 2014,22(05):731-745.

[6] Wang, Mei-Jin, Sun, Jian-Jun. Chinese stock market returns, earnings volatility and investor sentiment[J]. Economic Research, 2004(10):75-83.