How does the Performance Appraisal System Affect the Budget Slack of Central Enterprises—Evidence from a Quasi Natural Experiments
Budget slack is one of the important combination points of enterprise budget management and performance evalua-tion.Based on the agency theory and contingency theory,this paper examines the impact of performance appraisal systems on the budget slack of central enterprises using the DID(Difference-in-Differences)model.The results show that the performance appraisal system significantly reduces the degree of budget slack and budget execution deviation in central enterprises by re-ducing the first type of agency costs,and this effect is more pronounced in enterprises with low levels of internal control;the lower budget slack and budget execution deviation caused by the performance appraisal system can enhance the enterprise val-ue of central enterprises.In the future,regulators should further improve the performance appraisal system and improve the gov-ernance efficiency,and at the same time,differentiated regulatory measures should be adopted to promote the improvement of the internal control system of enterprises,so as to provide a strong mechanism guarantee for the full play of the governance effi-ciency of the performance appraisal system.
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