Research On The Cost Effect Of Implementing Financial Shared Services In Enterprise Groups

With the rise of globalization and the informatization wave,competition between enterprises is becoming more and more fierce.In order to obtain more resources,enterprise groups continue to expand their own scale.Acquisitions and mergers occur frequently,cross-country and cross-region operations have become a normal state.Due to the large scale of the enterprise group and its many branches,the accounting system is extremely complex and the financial coordination is difficult.A series of problems such as high cost and poor operating efficiency appear,which bring new challenges to the management of enterprises and seriously restrict the development of enterprise groups.In order to give play to the economies of scale and synergy effects of the enterprise group and achieve the purpose of further cost savings,the enterprise group has carried out financial management reforms,focusing energy and resources on core businesses,and placing some low-value,highly repetitive non-core businesses were stripped and integrated,so shared services emerged.As the core business department of the enterprise group,the finance department is also the most important business support department,and it has become an important area of shared service applications.But does the implementation of financial shared services by enterprise groups really reduce corporate costs as expected and have an effect on corporate performance?Which is a question that the practical community is very concerned about,and which is also a question that theoretical workers should start to study and answer.First,this article summarizes the literature related to this topic to discover the space and necessity of the research in this article.Then,this article conducts a theoretical analysis of financial shared services,and introduced the principal-agent theory,scale economy theory,business process reengineering theory and flat management theory to explain it theoretically.Then,this article makes theoretical deductions and puts forward four major research hypotheses: First,the implementation of financial shared services has a positive impact on the reduction of corporate group costs;Second,the longer the implementation of financial shared services,the more significant the cost reduction effect;Third,under the condition that other conditions remain unchanged,the cost reduction effect of the implementation of financial shared services by state-owned enterprises is better than that of non-state-owned enterprises;Fourth,under the condition that other conditions remain unchanged,the cost reduction effect of the implementation of financial shared services by manufacturing enterprises is better than that of non-manufacturing enterprises.After that,by selecting listed companies that implemented financial shared services and matching companies that did not implement financial shared services between 2005 and 2015 in Shanghai and Shenzhen Exchange as samples,we removed some sample data that did not meet the requirements for empirical analysis.Through multiple regression analysis and PSM-DID test,this article finds that:(1)the implementation of financial shared services by enterprise groups can effectively reduce the cost of the enterprise;(2)the cost reduction effect of financial shared services is significantly positively related to the implementation time,that is,the longer it takes to implement financial shared services,the more obvious the cost reduction effect will be.(3)The nature of corporate equity has a moderating effect on the relationship between financial shared services and corporate costs,that is,the state-owned enterprises implement financial shared services to reduce costs more effectively than non-state-owned enterprises;(4)The industry in which the enterprise operates has a moderating effect on the relationship between financial shared services and corporate costs,that is,the effect of manufacturing enterprises implementing financial shared services to reduce costs is better than that of non-manufacturing enterprises.Finally,it points out the significance of the research results of this paper for enterprises that have not implemented financial shared services,and how to make enterprises implement financial shared services to bring greater cost effects.