Will the enterprise performance be enhanced by reduction of perks of executives of the state-owned enterprises?

Abstract

This paper carries out the quasi-experiment through the policy implementation of “eight provisions”, and researches the relationship between the perks of the state-owned enterprises and enterprise performance. Before and after the policy implementation through the Difference in Differences (DID), compared with the private enterprises, the state-owned enterprise performance controlled by the local government is significantly declined after the policy implementation, because the perks becomes a way for the executives to obtain personal invisible welfare due to the regulation of the executive compensation of the state-owned enterprise. After the policy implementation of eight provisions, the executive incentive is limited, so that the state-owned enterprise performance e is also declined to a certain extent.