Product Market Competition,Management Power And Budgetary Slack

Budget management plays an important role in modern enterprise management control theory,and its two basic functions are planning function and incentive function.However,there are some problems in the practical application of budget management,which has aroused widespread concern in the theoretical and practical circles.Especially,the opportunistic behavior of budgetary slack in the budget preparation process has become the hotspot of the current research.According to the previous research,the research results can be summarized into two levels: the research method,the questionnaire and experimental method as the main method of budgetary slack research;research content,the degree of budget participation,information asymmetry,and the main factors that affect the level of budgetary slack.Among these main factors,management power plays a vital role.However,the previous research literature rarely link this concept directly to the problem of budgetary slack and carry out theoretical exposition and empirical analysis.And further combined with the inherent defects in the current capital market in China,that is,the predecessor of the majority of enterprises is the state-owned enterprises,the parent company directly assigned to the general manager,and the prevalence of the general manager of the chairman of the phenomenon,so he formed himself and supervise their own situation,Which makes management more likely to gain power gains.Then the enterprise power imbalance,the management will be the power of performance in a higher degree of budgetary slack on the considering that China’s economic structure is currently in the stage of adjustment,different enterprises face different market competition,the relationship between management power and budgetary slack will also be affected by this? Therefore,it is necessary to study whether product market competition,management power and budgetary slack are related and what kind of relationship is necessary.It can provide a new perspective for the establishment of perfect corporate governance mechanism under our characteristic economic system.In this paper,the inherent defects of listed companies in China as a research background,selected from 2013 to 2015,Shanghai and Shenzhen A-share listed companies as a research sample,from the perspective of product market competition to analyze the relationship between management power and budgetary slack.First of all,this paper reviews the domestic and foreign scholars on the product market competition,management power and budgetary slack of the literature,and the principal agent theory,the optimal contract theory andmanagement theory as a theoretical basis for the two assumptions.there is a positive relationship between management power and budget loosening,and product market competition has a deterrent to the relationship between the two.Then,the sample data of the listed companies were collected to carry on the empirical test,and the robustness analysis was used to test the robustness of the research conclusion by using the explanatory variables,explanatory variables and other measurement methods of adjusting variables.In this paper,we find that there is a positive correlation between management power and budgetary slack through empirical analysis,and the stronger the degree of competition in the product market,the stronger the positive correlation between management power and budgetary slack.Finally,this paper puts forward some suggestions on the management of the management power from the aspects of the perfection of the corporate governance structure,the standard of the performance appraisal standard and the perfection of the manager’s market,respectively,combining with the research conclusion and the power status of the management of the listed companies in our country,It also lists the shortcomings and future perspectives in the study.