How do market forces affect executive compensation in Chinese state-owned enterprises?

Fang HU, Weiqiang TAN, Qingquan XIN, Sixian YANG

Research output: Contribution to journalArticlespeer-review

7 Citations (Scopus)

Abstract

This paper studies how the evolution of market forces affects executive compensation in China's listed state-owned enterprises (SOEs) from 2000-2007. Along with the progress of market reforms we find that the level of executive compensation increases gradually and the relation between compensation and performance becomes more sensitive. However, the effect of market forces on executive compensation in SOEs is limited by CEOs' political connections. Our findings suggest that introducing exogenous market forces alone may not be sufficient to ensure the effectiveness of governance structure in a transition economy. Copyright © 2013 Elsevier Inc.
Original languageEnglish
Pages (from-to)78-87
JournalChina Economic Review
Volume25
Early online date15 Mar 2013
DOIs
Publication statusPublished - Jun 2013

Citation

Hu, F., Tan, W., Xin, Q., & Yang, S. (2013). How do market forces affect executive compensation in Chinese state-owned enterprises? China Economic Review, 25, 78-87. doi: 10.1016/j.chieco.2013.03.002

Keywords

  • Market-oriented reform
  • Executive compensation
  • Pay-performance sensitivity
  • China

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