Internal Control,media Supervision And Labor Investment Efficiency

As China’s economy enters the "New Normal",the previous growth model supported by factor input is no longer sustainable,and it is urgent to achieve high-quality economic development through efficiency reform and power reform.Under the background of weakening economic growth driven by capital investment,improving the investment efficiency of labor factors will become a new breakthrough to promote economic growth.From the micro point of view,labor investment efficiency refers to whether the scale of firms’ investment in labor is appropriate.Efficient labor investment has important strategic significance for enterprises to improve business performance and realize added value.However,different from capital investment,labor investment is characterized by strong mobility,long periodicity,and cost effectiveness difficult to be shown directly by numbers,which makes information asymmetry and agency problems prone to distort the allocation of labor resources and reduce production efficiency.Internal control,as an important governance mechanism of improving information quality and reducing agency conflicts,can effectively improve firm’s resource allocation efficiency.Therefore,it is important to clarify the relationship between internal control and labor investment efficiency,which is helpful for enterprises to reduce cost and increase efficiency,thus promoting the high-quality development of China’s economy.This paper will focus on the mechanism of internal control on labor investment efficiency,and analyze the moderating effect of media supervision between the two variables.Firstly,this paper constructs theoretical models of internal control,media supervision and labor investment efficiency based on principal-agent theory,information asymmetry theory,human capital theory and reputation effect theory.Secondly,using the data of A-share listed companies from 2003 to2020,this paper empirically examines the relationship between internal control and labor investment efficiency,and the moderating role of media supervision.Thirdly,the mechanism of internal control on labor investment efficiency and the roles of five elements of internal control are explored,and the heterogeneity of internal control on labor investment efficiency is investigated from the perspective of labor cost stickiness and labor intensity.Then,in the extended test,the PSM-DID model is used to test the policy effect of the step-to-step implementation of mandatory internal control audit on labor investment efficiency,and in respect of media supervision,the paper tests media coverage’s influence on labor investment efficiency of different positions.The conclusions of this paper are as follows.First,internal control can help improve labor investment efficiency.Second,media supervision can improve firms’ labor investment efficiency and has a negative moderating effect on the relationship between internal control and labor investment efficiency.Third,internal control mainly acts on labor investment efficiency through reducing agency cost,improving the quality of financial information and alleviating financing constraints.Among the five elements of internal control,internal environment and internal supervision can significantly affect labor investment efficiency.Forth,the governance effect of internal control on labor investment efficiency is more obvious in the samples with high labor cost stickiness and labor intensive.Fifth,the step-by-step implementation of mandatory internal control audit promotes the improvement of the quality of internal control,thus helping to optimize firm’s human capital structure.Sixth,media supervision promotes the management to improve the labor investment efficiency of highly skilled employees,which is conducive to improving the human capital structure of enterprises.