Policy Guidance,Duty Consumption And Enterprise Performance

In recent years, social and public media both pay much attention to the phenomenon of excess duty consumption of SOE executives. It has aggravated the economic burden of enterprises, seriously affects the performance of enterprises, undermines social atmosphere and image of the party as well. December 2012, the CPC Central Committee promulgated the "Eight Provisions" to carry out strict regulations and restrictions on the duty consumption behavior of SOE executives. According to the regulations, party members and leading cadres should stop the extravagance and waste, rigorously enforce thrift. Did the duty consumption behavior of SOE executives get effective control with publication of "Eight Provisions" and relevant policies? With reduction in duty consumption, what change will happen to state-owned enterprise performance? How the government should formulate relevant policies to motivate SOE executives reasonably and effectively? All above are worth in-depth study.In this paper, based on the separate theory in two rights and the principal-agent theory and so on, drawing on existing research results, carding the domestic and international pertinent literature, combined introduction of the "eight provisions" with policy control and macro background of Chinese economic transformation faced by SOE, we analyses in theory and point out the necessity of research on the influence of policy orientation on duty consumption and enterprise performance under the background of Chinese SOE system, then propose suitable assumptions and build models. This paper chooses financial data for 2009-2014 state-owned listed enterprises as research samples, empirically analyses changes of duty consumption and performance of state-owned listed enterprises after the performance of the "eight provisions" by using the SPSS11.5 software for empirical research on selected samples. Then this paper chooses CRCC, which spent most on business entertainment among all A-share listed companies in 2012, as a typical case. In this paper, return on total assets is used to reflect the enterprise performance, the duty consumption is measured as the sum of the eight charges from "other cash flows related to operating activities", which is published in notes to the annual reports. This article selects other reasonable related variables as control variables of the models as well.The research results show that the level of duty consumption in SOE reduced significantly after the introduction of "eight provisions". It showed a negative correlation between the level of duty consumption in SOE and the enterprise performance. The operation of enterprises has been significantly improved with the reduce of duty consumption. Based on above analysis, this paper puts forward six policy recommendations for reducing the level of duty consumption in SOE and promoting the enterprise performance, such as strictly implementing the "eight provisions", establishing and perfecting the system of SOE information disclosure, perfecting the corporate governance structure of SOE, introducing external manager market competition mechanism, implementing market oriented executive selection and appointment mechanism of SOE, implementing the system of duty consumption budget, approval and reimbursement, carrying out the reform of executive pay of SOE and so on. Can other invisible benefits besides duty consumption take roles as incentive effect on the SOE executives? When duty consumption has been somewhat inhibited, whether it will produce insufficient encouragement or not? How to establish a scientific and effective incentive measures to make up for lack of duty consumption? In this paper, all possible directions above are pointed out for further research.