Political Promotion Incentive、Internal Control Effectiveness And Corporate Performance

Because of the existence of principal-agent problem,we need to design scientific and reasonable incentive mechanism, which enables the operator ‘s benefits consistent with the interests of the company.However,the state-owned enterprise is based on the multi-level principal-agent relationship,so the final owner is absent,the power and the sense of responsibility of the incentive and decision-making subject of state-owned enterprises is not strong.It shows that the incentive of state-owned enterprise operator is faced with many difficulties,however state-owned enterprises play a vital role in the socialist market economy,so the study of state-owned enterprise operator incentive is particularly important.The incentive methods tend to be diversified, such as salary incentive, equity incentive, political promotion incentives,etc.The domestic and foreign research on the compensation, equity incentive is more,but the study of political promotion incentives are rare.Considering that the effectiveness of internal control and political promotion incentive, enterprise performance is closely related,the research purpose of this paper is to discuss the relationship among political promotion incentives, internal control effectiveness and corporate performance to determine scientific and rational way of executive incentive,thus making the operator goal consistent with the enterprise goal、reducing principal-agent cost and promoting the effective implementation of the internal control system, and ultimately improving business performance.First,we make a comprehensive review of relevant research results at home and abroad,and analyze the relationship among political promotion incentives,internal control effectiveness and enterprise performance and put forward the hypothesis of this article based on the theory such as the principal-agent theory, incentive theory.Second,we use econometric software such as SPSS22.0, Eviews7.0 to make the regression analysis on the relationship among the operator political promotion incentive, internal control effectiveness, and the enterprise performance based on 2007 ~ 2014 a-share listed state-owned enterprises and get the following conclusions.In the rotary year, there issignificant negative correlation between political promotion incentive of state-owned listed companies operators and internal control effectiveness, it does not appear the phenomenon when not in the rotary year. In the rotary year, there is significant positive correlation between state-owned listed companies operators political promotion incentive and corporate performance,but they does not exist significant correlation when not in rotary year.There is significant positive correlation between state-owned listed companies internal control effectiveness and corporate performance.Place holding state-owned listed companies internal control effectiveness have positive moderate effect on the relationship between political promotion incentive and corporate performance. In addition, enterprise performance, internal control effectiveness is significantly positively related to company size, operating income growth rate and significantly negatively related to the debt levels of the enterprise.Equity concentration has significant positive influence on enterprise performance as well.Finally,we put forward the corresponding countermeasures and suggestions according to the research conclusion of this paper. Research of this paper enriches the study about the managers’ incentive,which can provides reference for the design of the executive incentive mechanism and the improvement of the internal control level and enterprise performance.Thus the research of this paepr has certain reference value.