PAN Yilin;ZHU Kai;CHEN Xinyuan
School of Accountancy, Shanghai University of Finance and Economics;Institute of Accounting and Finance in School of Accountancy, Shanghai University of Finance and Economics;Institute of Accounting and Finance in School of Accountancy, Shanghai University of Finance and Economics
This paper tested the impact of the allocation of decision-making power on the operational efficiency and market value of enterprises. On the one hand, centralized management can play a big role in coordinating enterprise resources, utilizing the internal market, and enhancing the efficiency of existing resource management. On the other hand, in making investment decisions with higher uncertainty, decentralized management can play a good role in combining decision-making power with proprietary knowledge. However, centralized managers may worsen over-investment in the absence of proprietary knowledge. By using the proportion of employee salary paid by the parent company as an indicator measuring the centralization level of the enterprise group, this paper tested the economic consequences of the allocation of decision-making power. According to the empirical results, centralized management of enterprise groups can remarkably enhance the efficiency of existing resource management, but it can trigger over-investment simultaneously. The path analysis results indicate that management efficiency and over-investment serve as the important means for decision-making power to affect corporate value. The research results of this paper are of great significance for enterprises in their establishing an appropriate allocation mode of decision-making power.
centralized management;management efficiency;over-investment;corporate value