Free Cash Flow, Cororate Governance Mechanism With State Executive Position Consumption

It has a history of one thousand years for post consumption in our country, however it was not until October2005, the question about the domestic income distribution in state-owned enterprises had a widespread discussion due to published by the world bank’s state-owned enterprises pay dividends:how much points? To whom?", which makes the position consumption in our country is being closely watched. Positions have historically as a way of incentive to encourage consumption can enjoy post consumer groups contribute to owners. However, this invisible, implicit incentives tend to have excessive use, especially to the state-owned enterprise reform period. Since1978,state-owned enterprises in our country gradually expand the autonomy of the enterprise, for two rights separation step by step to establish modern enterprise system nowadays. Under the modern enterprise system, composed of two rights separation, the owner and operator, as a result of information asymmetry, interests, and because the country is the owner of the enterprise, managers will not responsibility for their behavior decision-making, coupled with the existence of adverse selection and moral hazard, the operator in order to satisfy the interests of the individual and in the case of monetary compensation can not meet the demand of individual will choose for the position of excessive consumption. And the operating conditions of an enterprise is mainly see firms are flush with cash flow whether, in general,free cash flow of the enterprise available to managers, then, the manager is to distribute free cash flow as dividends to shareholders or their own use and when business is there plenty of free cash flow, whether consumption will increase state executive positions to be discussed. Nowadays, the economic development of the eastern coastal cities have better Midwestern cities development is good in our country, so under the condition of marketization degree better will be able to free cash flow and the inhibition effect of the relationship between position consumption is also need to consider the problem in reality. This paper adopt the way of combining the normative analysis and empirical test, combined with the system background of state-owned listed companies in China, to position the disclosure of the amount of consumption as a starting point, authentication enterprise free cash flow and post consumer relations, and the corporate governance mechanism on the relationship between the free cash flow and post consumption is to promote or inhibit for related research.The main research of this paper found that:(1) free cash flow is significantly positively related to state executive post consumption, shows the effects of free cash flow for executive consumption is very big and we want to appropriate control executives can have free cash flow in a lower position consumption;(2) the comments on holdings of listed companies, the higher the degree of marketization, the free cash flow and the relationship between state executive position consumption plays a promoting role, so our state-owned enterprises still need to constantly reform, speed up the pace of economic transition, the position of reduce the excessive consumption, improve enterprise performance, is given to illustrate the influence marketization index relationship between free cash flow related to the state executive post consumption of a factor; Actual controllers of listed companies control the increase of the ratio on the relationship between the free cash flow and post consumption plays a promoting role, indicates that the actual control of control people have more can’t play a role in supervision, so as to promote the positive relationship of the two, explains how to control the actual control proportion is free cash flow consumption with state executive position related to one factor; The joining together of two position of free cash flow and the influence of the state executive post consumer relationship is not significant, but when the two separated as to promote the free cash flow positive correlation with state executive position consumption, this is mainly due to the absence of "owners" cause ineffective supervision, free cash flow and affected the joining together of two post state executive position consumption related to one factor; The higher the proportion of independent director, the free cash flow with state executive position consumption plays an inhibitory effect on the relationship between, make independent directors proportion on the relations between the two was not significant, but the low proportion of independent directors is to promote the free cash flow positive correlation with state executive position consumption, it shows that when the state holding listed companies to set up the independent director is less, its supervision effect is not obvious, the increase of free cash flow also promoted the functionary consumption increase, suggests that the independent directors proportion is also affect the free cash flow consumption related with state executive position of a factor.The research findings show that:(1) to strengthen the supervision of the chief executives of state-owned enterprises behavior and prevent position consumption increase as a result of ineffective supervision, effective incentives to executives, at the same time reduce executives with post the possibility of consumption to meet their own lusts;(2) to further improve the laws and regulations of administrative costs, the problem of post consumption there is already a long time, it was not until2006in China paid attention to the hidden trouble of position caused by excessive consumption, although already presented some files, but not perfect, so to consumption of the relevant laws and regulations to supplement and emphasis;(3) cultivate the self-discipline behavior of managers, because the country is the owner of the enterprise, top executives because of the existence of stability will not be responsible for the future of the enterprise, on the contrary is easier to manage by its own interests, therefore, have a good self-discipline, the action to consider for the future development of the enterprise management is a guarantee to reduce state-owned post consumption.