Government Subsidy, Corporate Pay-Gap and Firm’s Financial Performance: Evidence from China

We analyze the relation between government subsidization and the corporate pay-gap between executives and employees for a relatively large number of Chinese corporations. Our results show that government subsidy, under managerial control, can be used to increase executives’ compensation, and consequ...

Ausführliche Beschreibung

Gespeichert in:
Bibliographische Detailangaben
Veröffentlicht in:Accounting and finance research 2019-07, Vol.8 (3), p.86
Hauptverfasser: Bu, Danlu, Shalchian, Homayoon, Huang, Rong, Hu, Fang
Format: Artikel
Sprache:eng
Online-Zugang:Volltext
Tags: Tag hinzufügen
Keine Tags, Fügen Sie den ersten Tag hinzu!
Beschreibung
Zusammenfassung:We analyze the relation between government subsidization and the corporate pay-gap between executives and employees for a relatively large number of Chinese corporations. Our results show that government subsidy, under managerial control, can be used to increase executives’ compensation, and consequently, the corporate pay-gap in China. Our results also show that the effect of government subsidy on the corporate pay-gap is more significant among state-owned enterprises (SOEs) rather than private companies (non-SOEs). Finally, our results suggest that while the total pay-gap between the executives and employees has a positive impact on a firm’s financial success, the pay-gap caused by government subsidy negatively affects the firm’s economic performance.  
ISSN:1927-5986
1927-5994
DOI:10.5430/afr.v8n3p86