Executive Perks,Marketization Process And Inefficient Investment

Under the condition of market economy,investment is an important driving force to promote the development of the national economy.For the microeconomic subject,investment is an important engine to promote the development of enterprises,and provide a steady stream of power for the operation of the enterprise capital chain.Investment as a source of corporate value creation,its efficiency directly relates to the success of corporate value creation.Efficient investment decisions are beneficial to the growth of corporate future cash flow,and inefficient investment decisions are not conducive to the long-term development of enterprises and even bring disastrous consequences to the enterprise.Therefore,based on the importance of investment efficiency to the enterprise,the efficiency of investment for the article topic for in-depth analysis,it will provide a theoretical basis for improving corporate value and achieving sustained and healthy economic development.At the same time,with the increase of anticorruption and the improvement of the system,corruption has been greatly curbed,executive perks as a cradle of corporate corruption also caused a wide range of scholar's attention.Investment as one of the core content of the company's financial management has a significant impact on the changes of the company performance.And executive perks as an important part of the company's agency costs may have a certain impact on the efficiency of business investment.Thus it can be seen that the study of the impact of executive perks on inefficient investment is of great significance to improve the level of corporate governance and the efficiency of enterprise investment.In addition,the investment behavior of enterprises is inevitably affected by the external system environment and the marketization process as an external governance mechanism may play an important role on the relationship between executive perks and inefficient investment.Therefore,this paper examines the influencing factors of the marketization process,and from the macroscopic perspective to examine the role of the marketization process in the relationship between executive perks and inefficient investment also has certain significance.Based on the above problems,this paper takes the empirical data of A-share listed companies in China from 2010 to 2014 as the research sample,and construct model to study the relationship between executive perks,marketization process and inefficient investment.This article mainly discusses the impact of executive perks tothe inefficient investment behavior of enterprises,and from the perspective of the marketization process to study the influence of the hidden incentive on the inefficient investment behavior of the enterprises,and investigates the influence of the governance mechanism of the external system environment(marketization process)on the positive correlation between executive perks and inefficient investment.The results show that there is a significant positive correlation between executive perks and inefficient investment,the higher the level of executive perks,the more serious the phenomenon of inefficient investment,and the marketization process can effectively inhibit the positive relationship between executive perks and the efficiency of investment.This is,in areas with high marketization level,the resource allocation efficiency is higher,the managers face more stringent market supervision environment,which makes the executives less chance to obtain private income through the in-service consumption,which is helpful to alleviate the company's agent problem,Enterprise investment efficiency,inhibit the phenomenon of inefficient investment.On the contrary,in areas with low levels of marketization,the incentive and supervision mechanisms of professional managers are not perfect,leading executives to occupy the remaining resources of the company through in-service consumption,and the lower level of marketization also means The company faces a poor external governance environment,making it easier for executives to take advantage of executive perks against shareholders' interests,leading to serious investment or overinvestment.Finally,in order to further study the specific impact of executive perks on inefficient investment,the inefficient investment is divided into overinvestment and underinvestment.The results show that the increasing of executive perks will reduce the free cash flow that companies use to invest;companies are likely to miss out on high-quality investment projects because of a shortage of funds,which can result in a lack of investment.To sum up,this paper puts forward the following policy Suggestions: First,strengthens the supervision of executive perks.First of all,the supervision of executive perks is an important part of the corporate governance mechanism,regulate the executive perks of the listed companies,and make executives' rights,responsibilities and interests clear.Secondly,establish a sound oversight system for executive perks,and continuously improve the existing corporate governance mechanism.Finally,strengthen the enterprise's internal accounting control and audit supervision.Make full use of internal accounting control to constraint executive perks,preventing improper executive perks is reflected as a normal operating expenses,and ultimately to enhance the value of the purpose of the enterprise.Second,improve the optimal allocation of market resources.The state should further accelerate the market construction,and constantly narrow the gap between the provinces and cities of the market process to improve the overall operational efficiency of the market.Furthermore,it provides an external market that can effectively allocate resources.