Free cash flow and position-related consumption of senior management-based on empirical data of state-owned listed companies

摘要

The ultimate owner of the state-owned listed companies is the State, but the State cannot directly participate in the supervision of the managers of the company, so the owner may be "absent" in many state-owned listed companies, leading to excessive position-related consumption of the company's senior management by using the resources of the company in order to seek personal benefits. When the free cash flow is abundant, the senior management will more intend to put it into their own position-related consumption, resulting in higher agency costs. This article collects the data of A-share state-owned listed companies from 2009 to 2015 as research sample, and empirically studies the impact of free cash flow and the "Eight Regulations" on the position-related consumption of senior management. According to the research, excessive free cash flow will promote the position-related consumption of senior management of state-owned listed companies, resulting in higher agency costs; and in case the enterprise has certain free cash flow, the promulgation of the "Eight Regulations" has a restraining effect on the position-related consumption of senior management in the state-owned listed companies.