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The Control Rights of the Major Shareholder and the On-the-job Consumption Behavior of the Management Layer of Chinese Listed Companies

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DOI: 10.23977/infkm.2023.040107 | Downloads: 3 | Views: 276

Author(s)

Min Wang 1, Zimin Gu 1, Peng Xu 1

Affiliation(s)

1 School of Business, Linyi University, Linyi, China

Corresponding Author

Peng Xu

ABSTRACT

In recent years, the issue of excessive on-the-job consumption of the management of Chinese listed companies disclosed by the media has caused widespread concern. In the case of low monetary compensation, immature equity incentives, and relatively loose market regulation, the management of Chinese listed companies using power to increase on-the-job consumption has become a common phenomenon. Different from the highly dispersed equity of Western companies, the equity of Chinese listed companies is relatively concentrated. Under the Chinese governance environment, can the major shareholder who is universal and has the supervisory ability and motivation effectively exercise its supervisory functions and constrain the management's excessive on-the-job consumption? In view of this, from the perspective of cooperative game theory, this paper measures the control rights of the major shareholder of Chinese listed companies by using the Shapley-Shubik Power Index method established by Shapley and Shubik, and studies the relationship between the control rights of the major shareholder and the on-the-job consumption behaviour of the management layer of Chinese listed companies. Based on the unbalanced panel data of Chinese listed companies from 2003 to 2016, we find that: (1) the greater the control rights of the major shareholder, the lower the on-the-job consumption of the management layer of the listed companies; (2) the on-the-job consumption of the management layer of the non-state-owned listed companies is higher than that of the state-owned listed companies.

KEYWORDS

Control rights, shapley-shubik power index, on-the-job consumption of the management layer, nature of the major shareholder

CITE THIS PAPER

Min Wang, Zimin Gu, Peng Xu, The Control Rights of the Major Shareholder and the On-the-job Consumption Behavior of the Management Layer of Chinese Listed Companies. Information and Knowledge Management (2023) Vol. 4: 52-62. DOI: http://dx.doi.org/10.23977/infkm.2023.040107.

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