Do policy burdens induce excessive managerial perks? Evidence from China’s stated-owned enterprises

Abstract

This paper explores the effect of policy burdens of China's state-owned enterprises (SOEs) on senior executives' excessive perks. The empirical analysis demonstrates that SOE policy burdens are significantly and positively correlated with senior executives' excessive perks, indicating that SOE policy burdens increase agency cost. The results hold after controlling for potential endogeneity. Moreover, we find the following evidences. Strategic policy burdens of SOEs have a significantly greater impact on their senior executives' excessive perks, compared with social policy burdens. The positive impact of SOE policy burdens on excessive perks is significantly weaker in east China due to the higher degree of marketization. The central government's stricter supervision can also alleviate the positive correlation between policy burdens of centrally administered SOEs and senior executives' excessive perks. ☆ This work was supported by the fundamental research cultivation fund of Zhongnan University of Economics and Law [2722020PY021].

Impact of returnee executives and managerial discretion on excess perquisite consumption

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The Moderating Mechanism of CEO Duality on Female Directors’ Attitudes toward Managerial Perks in AI Companies

“…Explained variable: Managerial perks is measured in logarithms (LNMP). This paper collects the detailed items of "Other Cash Paid Related To Business Activities" in the notes of the company's annual statements (Jianhui, Li, Meng, & Zhao, 2020;Liu, Wang, Zhang, & Zhang, 2012). Within these items, eight types of expenses that may be closely related to managerial perks are extracted: office expenses, travel expenses, business invitation expenses, communication expenses, overseas training expenses, board of directors' fees, car expenses and conference expenses.…”

The impact of employee compensation restrictions on labor productivity in state-owned enterprises: Evidence from China

“…The pay level of employees in SOEs in China is too high compared to private enterprises, the mobility of employees in stateowned enterprises is poor, and the degree of labor market constraints is low. Previous studies have shown that high wages are due to the excessive welfare of employees in SOEs (Bai et al, 2019;Jian et al, 2020;Kong et al, 2020), an important factor in aggravating the low efficiency of SOEs and is inconsistent with the basic assumptions of the efficiencywage theory. H1: Employee compensation restriction increases labor productivity in state-owned enterprises.…”