Party Organization Embeddedness And SOEs Executives’ Self-serving Behavior

Under the current "new normal" of steady economic growth in China,state-owned enterprises have also entered an important stage of high-quality development,but the self-interested behavior of state-owned enterprise executives has hindered the development of the state-owned economy.In order to curb the private interests of state-owned enterprise management and make up for the lack of internal supervision mechanisms,the Central Committee of the Communist Party of China has issued a number of policies and opinions to regulate and guide the behavior of enterprise executives in order to weaken the self-interest motivation of executives from the source.As an important material and political foundation for socialism with Chinese characteristics,state-owned enterprises in China have the unique advantage of adhering to the leadership of the party and strengthening party building.As an important part of the company’s internal governance structure,the party organization of the state-owned enterprise can cooperate with the external supervision mechanism to implement a comprehensive supervision of the behavior of the company’s management.Under the realistic background of the new round of deepening the reform of state-owned enterprises,can the core leadership role of the party organization of state-owned enterprises be effectively integrated with the company’s governance links to form a company governance model with Chinese characteristics?In this research background,this article takes executive rent-seeking behavior as an entry point,and based on the analysis of the motivation and economic consequences of management self-interest behavior,based on the perspective of salary contract and budget slack perspective,we investigate the relationship between the party organization embeddness and the self-interest behavior of state-owned enterprise executives.The panel data of A-share state-owned listed companies from 2010 to 2017 was selected as a research sample for relevant empirical analysis,and the following research conclusions were obtained: First,empirical research findings based on the perspective of salary contract,the party organization embeddness can better curb the self-interested behavior of state-owned enterprise executives;high-quality external audit shows a certain degree of synergistic governance effect by strengthening the party organization’s restraining effect on the self-interest behavior of executives;The restraining effect of self-interest behavior is more prominent in local state-owned enterprises and commercial state-owned enterprises,however,with the increasing attention of analysts and the inflow of "fresh blood" of the party organizations,the governance effects of the party organizations embeddness has not been correspondingly enhanced.Second,empirical research based on the perspective of budget slack found that part of the evidence reveals that the party organizations embeddness can alleviate the degree of budget slack in state-owned enterprises;however,the external supervision forces under different audit characteristics have not cooperated with the party organizations to show a certain degree of governance effect on budget slack,and the auditor’s industry expertise has instead exerted a relatively negative regulatory effect;the governance effect of the party organizations embeddness on budget slack is better as analysts’ attention increases,but in local state-owned enterprises,commercial state-owned enterprises,and with the increasing inflow of "fresh blood" of the party organizations,the governance effects of the party organizations embeddness have not been correspondingly enhanced.Third,based on the case study of Dongfeng Motor Co.,Ltd.,it was found that with the gradual improvement of the governance efficiency of Dongfeng Motor’s party organization,the company’s violations in the operation and management process,legal proceedings received,and the company’s management in the central inspection and enforcement The violations of laws and disciplines during the discipline review process are gradually decreasing.This article incorporates this institutional arrangement with Chinese characteristics under the political system of “party and government in one” in China,and comprehensively considers the local governance elements of China,which not only helps to clarify the specific path of the party organizations embeddness in corporate governance,but also improves Theoretical cognition of the enterprise’s unethical behavior in the context of institutional transformation,and provides empirical inspiration for understanding the coupling mechanism between the party organizations and other governance subjects.