Does Fintech affect the psychological traits of managers? Based on the perspective of manager overconfidence

Overconfidence has undertaken an indispensable role in the psychology of managers and places important significance on managers’ behavior and decision-making. This study investigates the effect of Fintech on the psychological traits of managers from the perspective of overconfidence based on the panel data of Chinese A-share non-financial listed firms and the digital inclusive finance index of Chinese prefecture-level cities between 2011 and 2020. The empirical results show that (1) Fintech exerts a negative effect on manager overconfidence; (2) the main channels of the negative effect of Fintech on manager overconfidence include Fintech coverage breadth and Fintech usage depth; (3) for firms with severe financing constraints and lower power concentration, the negative effect of Fintech on manager overconfidence is more prominent; and (4) our benchmark results still hold after a series of robust tests, including IV regression, altering the measurement of Fintech and manager overconfidence, and employing logit model re-estimation. Based on the above findings, this study provides some insights into the cause for managers’ psychological traits, maintaining managers’ mental health, and empowering the firms’ sustainable development by adopting Fintech.