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Managerial compensation structure and firm performance in Chinese PLCs

Managerial compensation structure and firm performance in Chinese PLCs

Su, Larry (2012) Managerial compensation structure and firm performance in Chinese PLCs. Asian Business and Management, 11. pp. 171-193. ISSN 1472-4782 (Print), 1476-9328 (Online) (doi:10.1057/abm.2011.31)

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Abstract

In this article, I examine whether and to what extent intra-firm compensation structure affects managerial incentives and firm performance. Using an unbalanced panel consisting of a total of 43 626 executives in 1362 publicly listed corporations in China during 1999–2007, I find that pay rewards increase as executives move up the corporate hierarchy and that the largest pay gap is between first- and second-tier executives. Pay dispersion is positively related to the number of tournament participants, level of risk in the business environment and firm performance. Moreover, state ownership and corporate governance play some role in determining managerial pay dispersion and firm performance. The empirical results are consistent with tournament theory and against equity, relative deprivation and sabotage theories of managerial compensation.

Item Type: Article
Uncontrolled Keywords: intra-firm compensation structure, managerial pay dispersion, firm performance, tournament theory
Subjects: H Social Sciences > HB Economic Theory
Faculty / Department / Research Group: Faculty of Business
Faculty of Business > Department of International Business & Economics
Related URLs:
Last Modified: 14 Oct 2016 09:20
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
URI: http://gala.gre.ac.uk/id/eprint/8196

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