An Re-examined Test of the Pay Regulation in Chinese SOEs:2007～2011
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| Title | An Re-examined Test of the Pay Regulation in Chinese SOEs:2007～2011
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| Author | Huang Zaisheng |
| Organization | Shanghai Branch, Nanjing Politics Institute of PLA, Shanghai, 200433, China |
| Email | 031044006@fudan.edu.cn |
| Key Words | SOEs；Pay Regulation；Relative Pay; Perks; Corporate Performance |
| Abstract | There is a wide concern in both theorectical and practical circles on whether the pay regulation in Chinese SOEs has effects on top managers’ pay incentive efficiency. This paper studies the pay regulation and its economic consequences in Chinese SOEs by utilizing rigorous econometric methods based on the data of A-shares companies from 2007 to 2011. we find that：(1) By controlling the effects of those factors such as firms’ accounting characteristics, employees’ human capital characteristics and corporate governance characteristics, the relative pay in SOEs is significantly lower than that of non-SOEs; furthermore, from the whole point of view, there is a significant positive relationship between the capacity of government intervention and the effectiveness of the pay regulation in SOEs. (2) As far as the extent and degree of the pay regulation, through the decomposition of the relative pay, we find that the pay regulation only take effects in SOEs with negative abnormal relative pay; the bigger the absolute value of negative abnormal relative pay, the higher the degree of the pay regulation. (3)There exists a significant substituting relationship between regulated executive compensation and perks; but the positive abnormal relative pay has no effects on perks. (4)The negative abnormal relative pay has a significant negative performance effect, but the positive abnormal relative pay has not any significant effect. Taken together, our findings suggest that during the transitional period the pay regulation in SOEs lacks efficiency. |
| Serial Number | WP388 |
| Time | 2012-12-07 |
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