Measuring the Spread of Budget Slack

Abstract

Budget slack directly affects the validity of budget management. By leveraging the internal transfer mechanism, this article proposes an empirical model on budgetary fluctuation for forecasting the spread of the budget slack of company’s business units. This result provides material assistance on evaluating the rationale of the budget targets of company’s business units from empirical perspective.

Keywords: budget slack, budget target, spread

JEL Classification: M41, G30, J30