Psychology-based research in budgeting has focused on the effect of practices such as
participation on employees’ mental states, their behavior, and performance (Covaleski et al. 2003).
Consistent with prior research, we define budget participation as a process in which an employee is
involved with, and has influence on, the determination of his/her budget (Shields and Shields 1998;
Chong and Chong 2002).