Since the third Plenary Session of the 18th CPC Central Committee,the reform of state-owned enterprises has become the central link of the reform of the economic system,and one of the important issues is the problem of executive incentive.China’s state-owned enterprise executives have double identities,which are "economic man"and "political person".The question of how political promotion encourages managers’behavior and how to influence the value of the company needs to be further explored.Based on tournament theory,management incentive theory,higher-order theory and management power theory,theoretical deduction is carried out.Through literature review,we find out the shortcomings of existing research,clarify the direction of research,and build a logical framework.There has been little literature on the transmission mechanism or "intermediate bridge" of promotion incentives affecting enterprise performance.This paper selects two representative executive behavior decisions,which are business diversification and technology innovation input,and discusses whether they play a mediating role.Meanwhile,the moderating variables of institutional environment,Pyramid level and executive term are selected.From the different contexts,we explore the boundary conditions of executive promotion on executive behavior.Also,we explore how to coordinate the allocation of explicit incentives based on monetary compensation and equity incentive and the implicit incentive way represented by political promotion to achieve incentive and constraint compatibility.Selecting 2007-2016 years in Shanghai and Shenzhen shares of state-owned listed companies as the initial object of study,manually collecting samples of listed company chairman of specific changes.The main variable data are manually arranged through the annual report of the listed company.Propensity score matching(PSM)was used to calculate the propensity score(propensity score).The nearest neighbor matching method was used to match 1 to 1,and the average processing effect(ATT)was used to test the incentive effect of political promotion.On the basis of paired samples,multiple regression analysis was carried out to test the relationship between political promotion incentives and corporate performance,mediating effect of executive behavior and situational factors.The main conclusions of this paper are as follows:(1)The incentive of political promotion in state-owned enterprises is conducive to the promotion of short-term performance,but it will damage the long-term performance of the company.First of all,economic performance is an important indicator of executive promotion,so state-owned enterprise executives have motivation to improve their performance and boost their political future.Secondly,job promotion not only means increasing income,but also more importantly,power,achievement and social status.However,there are potential negative effects on the promotion of political promotion.Promotion incentives are likely to lead to excessive investment,risky acquisitions,image engineering and earnings management,which may damage long-term performance and lag behind.In this paper,financial performance and market performance are taken as explanatory variables respectively.PSM test and regression analysis confirm that there is a double effect of executive promotion incentive in state-owned enterprises.On one hand,they are significantly positively related to short-term performance,but they also have negative effects on long-term performance.From the dynamic effect of three lag phases,the negative effects of political promotion incentive will continue to be two years after executives’promotion,especially in second years.(2)When the political promotion opportunities for the executives of state-owned enterprises are higher,the enterprises are more likely to diversify their business and less investment in technological innovation.At the same time,business diversification plays a mediating role between political promotion and corporate performance.Diversification will become the favorable performance when considering the promotion of government executives of state-owned enterprises,diversified investment can effectively help the state-owned enterprises to achieve its social policy burden,add weight for promotion.The implementation of diversification strategy of state-owned enterprise group can help optimize the allocation of resources,decentralization of business risks and synergy effect through the construction of internal market,so as to effectively enhance corporate value.State owned executives have more strong motivation and more convenient channels to use information,funds and policy support resources to provide guarantee for diversified implementation,improve short-term performance and gain more chips for promotion.At the same time,government authorization and policy support are also the important reasons for increasing the degree of enterprise diversification.The study finds that the diversification is a path to promote the short-term performance of the company by the promotion of executive political promotion.The technological innovation of enterprises often has a long period,which is easy to cause short-term performance pressure.The state-owned enterprise executives in a certain term are usually not inclined to carry out innovative activities.In addition,the high risk characteristics of R&D investment,once the failure of the innovation project will seriously jeopardize its political promotion,so the innovation motivation of the state-owned enterprise executives is usually insufficient.(3)The moderating effect of different situational factors on the relationship between political promotion incentive and executive behavior.The positive relationship between political promotion incentive and corporate diversification is obvious in the poorer institutional environment,and the negative relationship with technological innovation input is not obvious in the better institutional environment.The worse the institutional environment is,the more serious the administrative intervention of state-owned enterprises is,which may promote enterprises to carry out diversified operation and assume more social policy burden,while state-owned enterprises have relatively low enthusiasm to carry out high-risk activities independently.And the efficiency of allocation of resources,transparency of the company,the protection of property rights and the level of the rule of law are relatively low,which is not conducive to the development of innovative activities.When there are more levels in Pyramid,the negative relationship between the political promotion incentive and the investment of the company’s technological innovation is not obvious.The moderate extension of Pyramid level of state-owned enterprise groups reduces the degree of government intervention,helps to improve decision-making power and business vitality,and further helps to weaken the political motivation of state-owned executives and carry out more technological innovation activities.Compared with the central enterprises,the positive relationship between the political incentive and business diversification of the local state-owned enterprises is more obvious than that of the central enterprises,and the negative relationship between them is also more obvious than that of the central enterprises.The SASAC of the State Council is more independent and efficient than the SASAC of the local governments.Besides,the scale,status and attention level of the central enterprises are all higher.The political connections between local governments and local state-owned enterprises are more extensive and administrative intervention is stronger.Local state owned executives prefer to diversify investment,so as to achieve"win-win" between government and business.(4)There is an alternative relationship between the incentive of political promotion and the incentive of salary.As a "quasi official",the state-owned enterprise executives have natural political demands.When they face higher opportunities for promotion,the effect of salary incentive will be weakened.The "salary limit order"makes the channel of executive compensation incentive in state-owned enterprises restrained,and will depend on alternative ways such as political promotion.In addition,performance appraisal faces many noises,sometimes it is difficult to accurately reflect executive performance and effort level,and promotion incentive adopts relative evaluation mechanism,which can compensate for the deficiency of salary incentive to a certain extent.This study confirms that political promotion and salary incentive have an interactive effect on corporate performance,and there is an alternative relationship between the two.The main points of this paper include:(1)finding the different effect of state-owned enterprise executives’ political promotion incentives on corporate performance and the substitution relationship between compensation incentives and equity incentives.(2)verifing the intermediary role of business diversification,and to reveal the role mechanism of political promotion incentive in state-owned enterprises to influence the performance of the company.(3)investigating the political promotion incentives and business diversification and the relationship between technological innovation input at different levels of context,recognition system environment promotion incentive and business relationship between Pyramid and the political pluralism level of political promotion incentives and technology innovation investment between the central enterprises and local state-owned enterprises behavior difference adjustment effect. |