Study On The Influence Of Managerial Risk Preference On Budgetary Slack

Though budget is a common management tool in business at home and abroad nowadays, successful cases are few, and it is widely criticized by academic and business circles because of budgetary slack. There are lots of factors that have impacts on budgetary slack. This dissertation studies the methods to measure budgetary slack in the context of managerial risk preference, and tries to find how managerial risk preference affects budgetary slack.This dissertation is divided into six chapters. Chapterl gives an introduction on the research background, significance, contents and the technical route. Chapter2shows literature review, which summarizes the relative studies on managerial risk preference, budgetary slack, and the relationship between them. Chapter3reviews the relevant theoretical basis, and gives the research hypothesis. Chapter4establishes a comprehensive evaluation system of managerial risk preference, and measures Chinese listed companies’managerial risk preference. In addition, the research model is given in Chapter4. Chapter5empirically tests the influence of managerial risk preference and the variety on budgetary slack of listed companies. Chapter6gives the empirical results:H1:Compared with the low level managers of risk preference, risk preference of high level managers to produce less budgetary slack; H2:Compared with the risk preferences of enhancement managers, risk preferences weakened managers to produce budgetary slack more.The main conclusions are as following:(1) The paper constructs the comprehensive evaluation system of managerial risk preference, and measures the managerial risk preference of Chinese listed companies;(2) This dissertation empirically tests the influence of managerial risk preference and the variety on budgetary slack of listed companies. In addition, the paper is not only forward-looking in theory, but provides a lot of reference value for the budget management practices for Chinese enterprises. We find the theoretical basis of budget Problems in Chinese enterprises. Meanwhile it discovers inhibition mechanism of budgetary slack in order to improve organizational performance.