Free Cash Flow, Internal Control And Executive Hidden Corruption: Empirical Evidence From State Listed Companies In The Context Of The Eight Rules

In recent years,China Resources Group and China National Petroleum Corporation,China Southern Airlines and other executives of corruption has been exposed.Executives of state-owned enterprise encountered with a series of corruption.Communist Party of China has been aware of the adverse effects of executive corruption,and attach great importance to this phenomenon.Central Commission for Discipline has carried out a series of anti-corruption actions and it has aroused the hot discussion of the society,thus making the corruption of senior executives more and more concerned by the enterprises and academia.In the existing literature,there is still a lack of complete understanding of the hidden causes of executive corruption.The influence of free cash flow and internal control on hidden corruption is not clear.Especially after the Eight Rules are issued,As for the requirement to eliminate unreasonable On-the-job consumption to eliminate extravagant doctrine,can the enterprise actual implement? Will the Eight Rules affect the relationship between free cash flow and its executive hidden corruption? Internal control will affect the executives hidden corruption whether or not?After analyzing and integrating the literature of senior executive corruption at home and abroad,this thesis puts forward the research hypothesis on the basis of the relevant research results,Based on 2010-2016 years' financial statements of Shanghai and Shenzhen A share listed companies,the model between free cash flow,internal control and executive hidden corruption is established.We finished it by using empirical analysis.We selected the free cash flow,Dibo company internal control index(2010-2016)as the study variables,select hidden corruption as the dependent variable.From the perspective of external policy change,with the promulgation of the Eights Rules,we studied the relationship between free cash flow,internal control and executive hidden corruption in 2010-2016 years.This thesis discusses the changes in the hidden corruption behavior of the senior executives and explore the impact of the Eight Rules on the performance of the enterprise.The results of the study show that free cash flow is positively related to executive hidden corruption.The Eights Rules inhibit the promotion of free cash flow to executive hidden corruption and play a negative regulatory role.Internal control is negatively related to executive hidden corruption.Internal control,as the internal management mechanism of state-owned enterprises,can supervise executives' hidden corruption behavior and Internal control has an alternative effect on Eight Rules.The Eight Rules led to a reduction in the grey income of executives of state-owned enterprises,It may be that the implementation of the Eight Rules and the improvement of the operational mechanism of enterprises need a process.The effect may not be seen in a short period of time.However,it takes a process to implement and improve the operation mechanism of the enterprise by the Eight Rules.This thesis innovation point:Firstly,this thesis uses the data of the listed companies of state-owned enterprises to demonstrate the relationship between free cash flow,internal control and executive hidden corruption from the micro point of view,providing theoretical support for the current hidden corruption in China.Secondly,Through the study of the thesis,it is found that there is a positive correlation between free cash flow and executive hidden corruption,which changes the former viewpoint of free cash flow,and provides feasible suggestions for the rational allocation of free cash flow in state-owned enterprises.Finally,because of the implementation of the eight provisions,the phenomenon of excessive on-the-job consumption of state-owned enterprises in China has been avoided.The thesis divides the data of state-owned listed companies in 2010-2016 years into groups.The conclusion is drawn from the comparison of the performance of state-owned enterprises in 2013.Provide theoretical support for follow-up policy and implementation.