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

Jianhui Jian, Huaqian Li, Leah Meng and Chunxiang Zhao

Economic Modelling, 2020, vol. 90, issue C, 54-65

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.

Keywords: Policy burdens; Excessive perks; SOEs; Marketization (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:90:y:2020:i:c:p:54-65

DOI: 10.1016/j.econmod.2020.05.002

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