The Relation Between The Policy Burden And Operating Performance In State-owned Enterprises

Since the founding of the PRC, our state-owned enterprises has undergonevarious changes and reforms, from" a secure job, mess" to" put authority to yieldbenefit", then to" contract", and later experienced the reform of modern enterprisesystem, and finally using the capital market to develop the reform of state-ownedenterprises. Although state-owned enterprises has undergone so many changes andreform change rapidly, but compared to the private enterprise, the state-ownedenterprise of our country still faces many problems.How to improve the performance of state-owned enterprises? The problem led toyears of reform of state-owned enterprises, but the problem has been the one of mostsignificant issues in the reform of china so far. People always think that managementof state-owned enterprises and the main problems in the development of state-ownedenterprise is that the property right is not clear and the mechanism is not flexible, aslong as that the function of government and enterprise is defined, and a reasonablesystem of modern enterprise is established, and then clear corporate governancestructure is carried out, it can improve the state-owned enterprises operatingperformance. People don’t realize the real reason of low efficiency of state-ownedenterprises is that state-owned enterprise undertakes heavy policy burden, socialburden, and lack of viability. The famous scholar Yifu Lin thinks, policy burden is thebiggest fetters in reforming of our country state-owned company. If this problem can’tbe resolved, all the state-owned enterprises reform is in no means. So the paperfocuses on the correlation study of the policy burden and enterprise performance.It is different from the former studies that directly test the relationship betweenthe ownership and corporate performance. This paper chooses2008-2010healthyoperation of listed companies as samples, this paper firstly study how the governmenttarget effect the enterprise employee scale. The paper found the government will givesubsidies to these enterprises as compensation, but these subsidies cannot compensatefor negative effect on the performance of the enterprises because of the redundancy.The paper also found that the reason of negative effect on the performance of theenterprises is not the high cost of labor from the redundancy, the reason is thatredundancy reduces the employees and executives salary incentive, thus causes theenterprise manager agency cost increase. This study is important for the China’sstate-owned enterprise to reform.