Research On The Impact Of The Spirit Of Old Revolutionary Base Areas On Managerial Perk Consumption In China’s SOEs

With the rapid rise of crossover studies on “culture and finance”,it has become a new hotspot to explore enterprises’ economic decisionmaking behavior from the perspective of informal institutions such as culture and social norms.The cultural perspective of the current study of China lies in traditional Chinese culture such as Confucian culture,commercial culture and clan culture.In addition,the red culture with the spirit of old revolutionary base areas as an important part as the mainstream culture of the contemporary society under the leadership of the Communist Party of China,which has a far-reaching impact on China’s modern social changes and development,but fewer scholars take the spirit of old revolutionary base areas as an important non-institutional arrangement and theoretical basis in the Chinese context to investigate its influence on enterprises’ economic decision-making behavior.As the concentrated embodiment of red culture at the regional level in China,the spirit of old revolutionary base areas can produce internal and external constraints on the decision-making behavior of top executives and promoting their thriftiness and integrity in performing official duties,and then reducing managerial perk consumption in China’s SOEs.Based on the above analysis,this study introduces red culture into the financial and accounting research field of listed companies in China earlier,and based on the perspective of managerial perk consumption,attempts to explore how red cultural factors such as the spirit of old revolutionary base areas influence the economic decision-making behavior of enterprises and entrepreneurs.Using a sample of state-owned enterprises listed in the Shenzhen and Shanghai Stock Exchange for the period of 2013-2019,we construct a set of geographic-based variables regarding the spirit of old revolutionary base areas and then investigate how the spirit of old revolutionary base areas affects managerial perk consumption.Empirical results show that:(1)The spirit of old revolutionary base areas inhibits managerial perk consumption in China’s SOEs;(2)The military experience of top executives at the personal level and the revolutionary role models at the regional level,reinforce the negative influence of the spirit of old revolutionary base areas on managerial perk consumption;(3)Moreover,the negative relation between the spirit of old revolutionary base areas and managerial perk consumption is more pronounced in areas that have not suffered cultural shocks,in case of weak external supervision such as non-BIG4 auditors,low media coverage and far from the Securities Regulatory Bureaus,and when top executives have poverty experience.This paper validates the role of the spirit of old revolutionary base areas in corporate governance,enriches the literature on “culture and finance” in China’s context,consolidates the theoretical basis for inheriting the red gene in Chinese Communist Party’s history learning,and provides some enlightenment for how to better understand and regulate managerial perk consumption in China’s SOEs.