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Government audit, employee efficiency and labor cost stickiness

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  • Jia Li
  • Zhoutianyang Sun

Abstract

Does government audit affect employee allocation of enterprises? Using the quasi natural experiment and differences-in-differences(DID) model, this paper empirically tests the impact of government audit on employees efficiency and labor cost stickiness of state-owned enterprises (SOEs) in China. The results show that after the implementation of government audit, excess employees and labor cost stickiness of the audited enterprise is significantly reduced, which confirms the supervision and governance function of government audit on employee efficiency of SOEs. However, labor costs of the audited enterprise are not significantly reduced. These indicate from the side that the compensation system of SOEs conforms to market mechanisms, and there is no problem of employee over payment in China. This study enriches the relevant literature on the impact of government audit on employee policy of SOEs, and also provides empirical support for the full coverage of government audit.

Suggested Citation

  • Jia Li & Zhoutianyang Sun, 2023. "Government audit, employee efficiency and labor cost stickiness," PLOS ONE, Public Library of Science, vol. 18(9), pages 1-23, September.
    • Handle: RePEc:plo:pone00:0291014
    DOI: 10.1371/journal.pone.0291014
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    Cited by:

    1. Rongwang Guo & Jianxiu Wang & Yuntian You, 2024. "The impact of multiple discrimination on labor misallocation of China: Based on fsQCA method," PLOS ONE, Public Library of Science, vol. 19(8), pages 1-13, August.
    2. Xu, Hanwen & Han, Xiaofang & Shen, Yongjian & Zhou, Minting, 2025. "Is internal control more efficient in employee-friendly firms?," International Review of Financial Analysis, Elsevier, vol. 97(C).

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