Study On Relationship Of Managerial Power,Budgetary Ratchet Effect And Budgetary Slack

The existence and influence of budgetary slack restricts the play of budget management,which is an important problem that needs to be solved urgently in budget management control,and it has gradually become a hot topic for scholars.Foreign scholars have gradually introduced behavioral and psychological factors into the research of budgetary slack,while the domestic is still less concerned about behavior and psychological factors,mainly from the traditional principal-agent theory to study.The managerial power theory think that executives have a certain impact on the development of their own pay,and the characteristics of listed companies' "dominance",to a certain extent,has increased the influence of executives on their own pay,and the possibility of the rent-seeking behavior of executives make loose budget to gain against the company and the interests of other shareholders is increased.According to the theory of asymmetric information,the existence of the "budget ratchet" plays a role in restraining budget slack,improving the corporate governance structure,and promoting the healthy and long-term development of the company.Therefore,under the framework of corporate governance,this paper studies the relationship between managerial power,budget ratchet effect and budget slack.Based on the analysis of management rights and the theory of information asymmetry,this paper draws lessons from the previous scholars' research experience on executive power and budget relaxation,and examines the power of executive power,budgetary ratcheting and budget relaxation.Based on this,this paper chooses the listed companies of Shanghai Stock Exchange from 2014 to 2016 as the research sample,puts forward the hypothesis and carries on the empirical analysis through the theory.Through the selection of executives whether concurrent,equity balance and executive education of three single indicators,as the size of the study of executive power dummy variables.At the same time,using the budget ratchet effect,we study the relationship between executive power and budget ratchet effect and budget slack.Finally,we study the influence of the budgetary ratcheting effect on the relationship between executive power and budget relaxation by constructing the cross of the executive power and the budget ratcheting effect.The empirical results show that the executive power is significantly positively correlated with the budget loosening,that is,the greater the power of executives,the greater the degree of corporate budget relaxation;the greater the budget ratcheting effect,the smaller the degree of corporate budget relaxation;budget ratchet effect can effectively curb executive power The promotion of budget relaxation,that is,the existence of the budget ratcheting effect,can effectively constrain executive power.In the end,this paper give some advise from the strengthening of budget information sharing,reducing information asymmetry,strengthening executive incentives,guiding executives self-interest behavior,optimizing the allocation of executive power,strengthening the supervision of executive power,enhancing the rationality of performance evaluation standards as well as the development of the minimum budget standard five aspects of the corresponding recommendations.Based on the large frame of corporate governance,this paper studies the influence of executive power and budgetary ratcheting on budget relaxation,and proves that the budget ratchet effect can suppress the promotion of budget relaxation by the executive power,so as to improve the reasonable governance structure,to improve the abuse of executive power,to curb the executive out of the opportunistic behavior of the loosening of the budget to provide some reference.