*6.2. Further Analysis*

#### 6.2.1. Heterogeneity Analysis of Enterprise Property Rights

Considering China's political system and actual national conditions, enterprises with different property rights are divergent in business models, corporate organizational frameworks, etc. Therefore, a comparative analysis of enterprises with different property rights is an essential step in the study of corporate governance. In this paper, sample enterprises are divided into "SOE" and "non-SOE" groups according to the nature of property rights, and the relationship between the uncertainty of economic policy and excessive compensation and on-the-job consumption of executives is verified in groups. The verification results are illustrated in Table 14. From the results of the grouping regression, we can see that the impact of economic policy uncertainty on executive OverPay is still negative and significant in SOEs, but negative and not significant in non-SOEs. The reason is that, compared with non-SOEs, SOEs feature stricter control over the compensation of executives, exerting a strong restraining effect. Meanwhile, uncertain economic policy has a more significant effect on the promotion of C-suite excessive on-the-job consumption in SOEs. When executives' excessive compensation is restrained, they will actively make up for the shortfall through alternative methods, which is also in line with the hypotheses of this paper. Meanwhile, the nature of property rights of SOEs leads to multiple agency problems. The shareholders of SOEs do not actively play the role of supervisors, and thus a series of issues, including excessive on-the-job consumption of executives, have not been effectively addressed.

**OverPay UnPerks** EPU <sup>−</sup>0.277 \*\*\* (−8.016) −0.050 (−1.244) 0.004 \* (1.741) 0.049 \*\*\*

**Table 14.** Heterogeneity analysis of property lefts of enterprises.



**Table 14.** *Cont.*

\* *p* < 0.05, \*\* *p* < 0.01, \*\*\* *p* < 0.001.

#### 6.2.2. Heterogeneity Analysis of Institutional Investors

Different types of institutional investors play different roles in corporate governance. Therefore, this paper further analyzes the model by distinguishing the types of institutional investors. Drawing on the practices of Niu et al. [47], etc., this paper uses Formula 10 to study the heterogeneity of institutional investors through the dimensions of time and industry. The definitions of the variables used in Formula (10) are presented in Table 15.

$$\begin{cases} SD\_{it} = \frac{INVH\_{it}}{STDID\_{it-3}INVH\_{it-2}INVH\_{it-1}}\\ STABLE\_{it} = \begin{cases} 1, SD\_{it} \ge MEMAN\_{tj} \left(SD\_{tj}\right) \\ 0, others \end{cases} \end{cases} \tag{10}$$



The results of the grouping regression for different types of institutional investors are illustrated in Table 16. The impact of economic policy uncertainty on OverPay is negative for both stable and transactional institutional investors, which is significant at the level of 1%. Yet the impact of economic policy on UnPerks is only significant for transactional institutional investors. The reason for this finding is that institutional investors of different natures are not uniformly enthusiastic about enterprise supervision. Due to long-term shareholding, stable institutional investors boast deeper understanding of the enterprise and are more active in corporate governance and supervision. Moreover, stable institutional investors highlight the long-term profits of enterprises, and thus their supervision of Csuite is more effective. Therefore, stable institutional investors wield a more prominent inhibitory effect on executives' excessive on-the-job consumption.


**Table 16.** Heterogeneity grouping regression results of institutional investors.

\* *p* < 0.1, \*\* *p* < 0.05, \*\*\* *p* < 0.01.

#### 6.2.3. Heterogeneity Analysis of Competitive Position of Enterprises

Market competition is an important bridge between macro-economy and corporate development. Drawing on the research of Yang and Yin [48], etc., this paper adopts the Lerner Index to measure the competitive position of enterprises, calculating the median of the Lerner Index by year and industry. If an enterprise's competitive index exceeds the median, the value of "1" is assigned, representing a strong competitive position. The competitive index of enterprises below the median value is assigned as "0", representing a weak competitive position. The results of the grouping regression according to competition positions are illustrated in Table 17. The influence of economic policy on OverPay is negative in enterprises with both strong and weak competitive positions, which is significant at the level of 1%, indicating that the uncertainty of economic policy will inhibit executive excessive compensation. However, in the enterprises with a stronger competitive position, higher uncertainty of economic policy will restrain C-suite excessive on-the-job consumption. On the contrary, in the enterprises with a weaker competitive position, rising policy uncertainty will encourage such consumption. The conclusion is that market competition can play a certain governance role and alleviate the principal-agent problem [49]. Market competition provides opportunities for corporate performance comparison, which empowers investors and analysts with more motives and channels to obtain relevant information of enterprises, influences the decision-making of enterprise executives through various ways such as information effect and reputation mechanism, and restricts the speculation and self-interest behavior of executives in more competitive enterprises.


**Table 17.** Heterogeneity group results of competitive position of enterprises.

\* *p* < 0.1, \*\* *p* < 0.05, \*\*\* *p* < 0.01.

#### **7. Conclusions and Discussion**

At present, with the normalization of pandemic control in China and the turbulent international landscape, it is important to highlight the impact of economic policy uncertainty. In addition to the impact of the policy itself on industries and enterprises, the uncertainties caused by policy changes and execution will also exert an adverse effect on enterprises. When the prospects of an enterprise are unclear, it will implement contractionary policies through reduce investment, which is not conducive to the growth of the enterprise and market as well as employment expansion, exerting a negative impact on the overall macro-economy. Therefore, in the period of sound economic operation, the government should give full control to the self-regulation of the market and enhance the capability of enterprises to predict and avert risks. If we are determined to adjust the economic policy, government organizations should establish consultation platforms. Before new policies are rolled out, we should thoroughly investigate and analyze the market trends and corporate development and reassure the market with stable expectations. After the introduction of policies, we should also manage to drive away people's concerns through policy interpretation. The policy should also be fully executed to avoid frequent and unnecessary changes, so as to ensure its long-term consistency.

Furthermore, facing the rising uncertainty of external macroeconomic policies, enterprises should improve risk identification and response mechanisms, stay alert to changes in economic policies, tap into their advantages, and improve the efficiency of resource allocation. Meanwhile, they should strengthen internal control and power restriction. The

C-suite supervision should not only target explicit self-interest behavior, but also loopholes in the underlying implicit self-interest behavior, so as to reduce such behaviors, including excessive on-the-job consumption. Furthermore, when determining C-suite compensation, enterprises should comprehensively consider the traits of executives, including capability, career goals, expected income, etc., and be aware that executives will not obtain perks only from one single channel. When suppressing their compensation, executives will seek alternative benefits through on-the-job consumption, etc. While allowing executives to have bargaining power in compensation, enterprises should also anticipate and guard against alternative channels of self-interest.

Finally, through the further analysis of this paper, we can find that SOEs should focus on the promotion effect of economic policy uncertainty on executives' implicit self-interest behavior. Stable institutional investors exert certain governance effects on C-suite selfinterest behavior. Enterprises with unstable institutional investors should strengthen the quality of information disclosure, reduce information asymmetry, enhance internal control and supervision, and accept external monitoring from media and analysts, so as to better restrain the self-interest behavior of executives. Fair and orderly market competition can also deliver certain governance effects. The government should do its utmost to create a sound environment of market competition for the development of enterprises and give full control to the self-regulation of the market.

**Author Contributions:** Conceptualization, H.H.; Methodology, H.H.; Data curation, C.L.; Writing original draft, C.L.; Writing—review & editing, Y.H. All authors have read and agreed to the published version of the manuscript.

**Funding:** This research received no external funding.

**Institutional Review Board Statement:** Not applicable.

**Informed Consent Statement:** Not applicable.

**Data Availability Statement:** The data will be made available on request from the corresponding author.

**Conflicts of Interest:** The authors declare no conflict of interest.
