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

Jian, J.; Li, H.; Meng, Leah; Zhao, C.

doi:10.1016/j.econmod.2020.05.002

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Authors

Jian, J.

Li, H.

Meng, Leah

Zhao, C.

Date

2020

Type

Journal Article

Metadata

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Citation

Jian, J. and Li, H. and Meng, L. and Zhao, C. 2020. Do policy burdens induce excessive managerial perks? Evidence from China's stated-owned enterprises. Economic Modelling. 90: pp. 54-65.

Source Title

Economic Modelling

DOI

10.1016/j.econmod.2020.05.002

ISSN

0264-9993

Faculty

Faculty of Business and Law

School

School of Accounting

URI

http://hdl.handle.net/20.500.11937/80725

Collection

Curtin Research Publications

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.