Study On The Influencing Factors Of The State-owned Enterprises' Discretionary Operational Expenditure

The ownership and management rights of modern enterprises are separated.Under the hypothesis of rational economic man,the goal of managers and owners are not consistent.Due to asymmetric information,managers will not always act according to the principle of maximizing the owner's benefit.Managers will be in its interests to damage the interests of the enterprise and the owner,resulting in discretionary expenditure.Because of the dual agency relationship that the whole people entrust state-owned enterprises to the government and the government entrust them to managers again,the corporate governance of state-owned enterprises are facing more problems.In addition,monopoly advantage,unstable incentive system and ample cash inflows lead to state-owned enterprises' discretionary expenditure problem is serious.In order to improve the operational efficiency of state-owned enterprises,and reduce the loss of state-owned assets,relevant measures must be taken to control the discretionary expenditure of state-owned enterprises,so the study of the discretionary expenditure's influencing factors of state-owned enterprises is necessary.Discretionary expenditure is divided into the discretionary capital expenditure and discretionary operational expenditure.In this paper,discretionary operational expenditure's level,and its factors of state-owned enterprises are mainly discussed.First,the writer analyzes the related theory,the present situation and problems of state-owned enterprises' discretionary operational expenditure.The results show that the problem of state-owned enterprises' discretionary operational expenditure is serious.On this basis,factors of the state-owned enterprises' discretionary operational expenditure are studied from four aspects,the nature of the enterprise,free cash flow,corporate governance and incentive system.The empirical results show that scale,monopoly,dividend policy,debt financing,cash,the executive's tenure of office and the executives' monetary compensation have important effect on state-owned enterprises' discretionary operational expenditure.It is different from general theories that debt financing don't play the role of constraining managers.On the contrary,raising the level of debt financing will lead to the increase of the state-owned enterprises' discretionary operational expenditure.Independent director and the SASAC's regulatory have no significant influence on the state-owned enterprises' discretionary operational expenditure.The independent director system and SASAC have no significant effect on the governance of state-owned enterprises.Chairman who also hold the position of general manager doesn't cause the increase of discretionary operational expenditure.On the contrary,it is negatively related to the state-owned enterprises' discretionary operational expenditure.According to the results of this empirical study,this paper proposed some measures from four aspects to control the state-owned enterprises' discretionary operational expenditure.In this paper,the research results provide guidance on how to control the state-owned enterprises' discretionary operational expenditure.The limitation of this paper is that the analysis on the results which are different from general theories is shallow,which still needs further research.