Perquisite Consumption And Enterprise Operating Performance

The phenomenon that the executives of China’s listed company use their authorityof office to seek excessive perquisite consumption caused wide public concern in oursociety, the opportunistic behavior that managers abuse their privileges for personal gainhas been denounced constantly, the government has promulgated a series of regulationsto restrict the perquisite consumption of executives in state-owned enterprises. However,for the cause and economic properties of perquisite consumption, academia has not yetformed a consensus: some scholars found that perquisite consumption is a form ofagency costs, others have pointed out the incentive side of perquisite consumption underspecific conditions. Therefore, a systematic and further research on the affecting factorsof perquisite consumption in China’s listed Company and the economic consequence onenterprise performance of perquisite consumption will have an important theoretical andpractical significance to improve the mechanism of governance, reduce moral hazard ofexecutives and improve the performance of China’s listed Company.On the basis of drawing on a wide range of domestic and foreign research resultsof perquisite consumption, this paper combines the changed internal and externalconstraints of perquisite consumption in our country in recent years, then propsehypothesis which accord with the reality of our country, taking the open financial dataof Shanghai and Shenzhen A shares listed companies during the period of2007-2011asthe study sample, this paper empirically studies the perquisite consumption instate-owned enterprise and private enterprise by using an appropriate econometricmodel, and explore the determinants factor of perquisite consumption and its economicconsequence on enterprise performance. The perquisite consumption model constructedin this paper can largely explain the perquisite consumption behavior, and get someconclusions that accorded with our actual situation.Specifically, the paper’s main research and innovation is reflected in the followingaspects:①Combing the fact that the government introduced a series of supervisions andmanagement measures which aimed at restraining the state-owned enterprises perquisiteconsumption, this paper discusses the different effects that the government supervisionsand constraints on state-owned enterprises and private enterprises, on the basis of thusresluts proposed the thesis hypothesis, taking the rate of management costs and the ratio of return on assets as the substitute variables of perquisite consumption and enterpriseperformance respectively, then selects the proper control variables, projects two modleswhich can strongly explain the perquisite consumption and its influence on state-ownedand private-owned companies.②Taking the open financial data in period of2007-2011which implemented thenew accounting standards in Shanghai and Shenzhen A shares of listed Company as theresearch sample and the perquisite consumption influencing factors regression model toresearch the effect factors of China’s perquisite consumption. The results show that theexecutives, monetary compensation, enterprise scale, financial leverage coefficient,dividend distribution, rent of enterprise, the number of four committee, staff wages, thenature of the industry, regional property, the annual variable, the management scale andthe age of general manager which describe the general manager’s personalcharacteristics, the qualifications of general manager could significantly influence themanager’s perquisite consumption. And perquisite consumption in private enterprises inrecent years has a tendency to increase year by year, while the perquisite consumptionin state-owned enterprises does not show a rapidly increase; in private enterprises, thereexists obvious "complementary" relation between monetary compensation andperquisite consumption, while in state-owned enterprises, there is no obvious“substitute” relation between monetary compensation and perquisite consumption. And,in private enterprisess, employee wages has a significantly positive effect on perquisiteconsumption, while in state-owned enterprises, the regression coefficient betweenemployee salary and perquisite consumption is negative. Finally, in both state-ownedenterprises and private-owned enterprises, dividend distribution has significant negativecorrelation with perquisite consumption, and the effection in state-owned enterprises islager.③Taking the related data of Chinese listed companies during the period of2007-2011, this paper uses the perquisite consumption influence modle to study theeffects of perquisite consumption on enterprise performance empirically. The resultsshow as follows：the perquisite consumption in private enterprises has a significantlynegative effect on performance, while the perquisite consumption in state-ownedenterprises does not significantly reduce the enterprise performance. No matter instate-owned enterprises or private enterprises, employee wages will significantlyimprove enterprise operating performance, and the mechanisam in private enterprise islager. Finally, both in state-owned enterprises and private enterprises, dividend distribution will significantly improve enterprise operating performance, and theeffection is more apparent in private enterprise.④Taking the2007-2011open financial data which implemented the newaccounting standards in Shanghai and Shenzhen A shares of listing Company as theresearch sample, distinguishing the different economic performance of perquisiteconsumption between the samples in state-owned company and private company underdifferent constraint conditions, this paper enriches the empirical research literature onperquisite consumption; meanwile, this paper unifies the perspective of agency andefficiency view on perquisite consumption together so that enhances the rationalexplanation for the general exists of perquisite consumption.