TY - JOUR
T1 - How do market forces affect executive compensation in chinese state-owned enterprises?
AU - Hu, Fang
AU - TAN, Weiqiang
AU - Xin, Qingquan
AU - Yang, Sixian
N1 - Funding Information:
We thank the editor, Prof. B.M. Fleisher, and the anonymous reviewer for their insightful comments and suggestions on this paper. The authors also thank Bin Ke, Micheal Firth, Bingxuan Lin, Liping Xu, and the participants at the 2009 American Accounting Association Annual Meeting, 2009 China International Conference in Finance at Guangzhou, seminar at Chongqing University, and Sun Yat-sen University. Hu thanks the Griffith Business School internal research grant of Griffith University . Tan thanks the Faculty Research Grant funding of this research by Hong Kong Baptist University . Xin is grateful for the funding of the National Natural Science Foundation of China (Project nos.: 71232004 , 71272087 and 70802067 ).
PY - 2013/6
Y1 - 2013/6
N2 - 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.
AB - 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.
KW - China
KW - Executive compensation
KW - Market-oriented reform
KW - Pay-performance sensitivity
UR - http://www.scopus.com/inward/record.url?scp=84876449576&partnerID=8YFLogxK
U2 - 10.1016/j.chieco.2013.03.002
DO - 10.1016/j.chieco.2013.03.002
M3 - Article
AN - SCOPUS:84876449576
VL - 25
SP - 78
EP - 87
JO - China Economic Review
JF - China Economic Review
SN - 1043-951X
IS - 1
ER -