Not all stakeholders are created equal: executive vertical pay disparity and firms’ choice of internal and external CSR

Zhong, Xi; Ren, Ge; Wu, Xiaojie

doi:10.1007/s11846-021-00502-8

Cited by 20 publications

(12 citation statements)

References 87 publications

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“…Specifically, Size is the firm size, and Age is the year of the sample firm minus the year of the firm's establishment. We also controlled for CSR , which is thought to influence firms' ability to access resources, and the data were extracted from Hexun (Zhong, Ren, & Wu, 2021):

italicSA goodbreak= goodbreak- 0.737 goodbreak\times italicSize goodbreak+ 0.043 goodbreak\times {Size}^{2} goodbreak- 0.04 goodbreak\times italicAge

…”

Section: Methodsmentioning

confidence: 99%

Impact of returnee executives and managerial discretion on excess perquisite consumption

Ren

Zeng

Zhong

2022

Business Ethics Env & Resp

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This study examines the impact of returnee executives on top management teams' (TMTs') unethical management behavior (e.g., excess perquisite consumption).Synthesizing insights from upper echelons theory and the psychological entitlement literature, this study proposes that returnee executives cause TMTs to generate a high degree of psychological entitlement, which subsequently leads to a high degree of excess perquisite consumption in their firms. In addition, this study proposes that returnee chief executive officers, product diversification, and regional institutional development moderate the aforementioned relationships by influencing managerial discretion. This study provides empirical evidence for the above view using a dataset that was constructed based on 1960 listed Chinese manufacturing companies from 2010 to 2019. From a psychological entitlement perspective, this study confirms, for the first time, that the introduction of returnee executives may have unintended negative consequences, for example, in promoting the excess perquisite consumption activities of TMTs.

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italicSA goodbreak= goodbreak- 0.737 goodbreak\times italicSize goodbreak+ 0.043 goodbreak\times {Size}^{2} goodbreak- 0.04 goodbreak\times italicAge

…”

Section: Methodsmentioning

confidence: 99%

Impact of returnee executives and managerial discretion on excess perquisite consumption

Ren

Zeng

Zhong

2022

Business Ethics Env & Resp

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“…Dependent variable: firm innovation. Measuring firm innovation has always been challenging (Zhong et al, 2021b). Some scholars use R&D investment; however, this reflects only one dimension (the financial resource inputs) of firms' innovation inputs and omits human resource inputs, organizational and managerial resource inputs and technological resource inputs.…”

Section: Methodsmentioning

confidence: 99%

“…Tournament theory provides the most consistent explanation of the economic consequences of vertical pay disparity (Zhong et al , 2021c). Tournament theory suggests that after each round of competition, the winner will receive promotions and huge bonuses, while the loser will receive nothing (Li et al , 2021b; Zhong et al , 2021b). Therefore, vertical pay disparity will stimulate executives to contribute their best efforts while discouraging shirking and free riding (Hambrick, 1995).…”

Section: Theoretical Basis and Hypothesesmentioning

confidence: 99%

“…Second, studies have not considered the moderating effect of managerial pay gaps (e.g. vertical pay disparity and horizontal pay dispersion), which have been shown to significantly affect executives’ motivation to respond to environmental changes (Lim, 2018; Xiong et al , 2021; Zhong et al , 2021b), in the relationship between EPU and innovation. Vertical pay disparity is the pay differential between the CEO and non-CEO top management team (TMT) members (Siegel and Hambrick, 2005), which facilitates good firm outcomes (Lim, 2018).…”

Section: Introductionmentioning

confidence: 99%

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Curvilinear effect of economic policy uncertainty on innovation in Chinese manufacturing firms: do managerial pay gaps matter?

Zhong

Chen

Ren

2022

CMS

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Purpose This study aims to re-examine the impact of economic policy uncertainty (EPU) on firm innovation. Studies on how EPU affects firm innovation have been inconclusive. The authors clarified the curvilinear relationship between EPU and firm innovation and examined the moderating effects of managerial pay gaps, specifically vertical pay disparity and horizontal pay dispersion. Design/methodology/approach This study’s analyses used data collected from Chinese listed companies from 2007 to 2019. Findings The authors found an inverted U-shaped relationship between EPU and firm innovation. Furthermore, vertical pay disparity strengthens the curvilinear relationship, while horizontal pay dispersion weakens it. Practical implications First, politicians should avoid adjusting economic policies too frequently because the high EPU levels created by frequent adjustments can inhibit business innovation. Second, firms should be aware that EPU creates opportunities for leapfrogging. In particular, firms can incentivize executives to take advantage of the valuable growth opportunities presented by EPU by widening vertical pay disparities and avoiding excessive horizontal pay dispersion. Originality/value First, the authors analyze not only the positive effects of lower EPU on firm innovation but also the negative impacts of higher EPU to examine EPU’s “double-edged sword” effect on firm innovation. Second, the investigation of vertical pay disparity and horizontal pay dispersion as moderating variables sheds new light on the equivocal research findings regarding the EPU–firm innovation relationship and clarifies the boundary conditions of the double-edged sword effect of EPU on firm innovation.

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“…Finally, we also control family firms variable. Previous studies have used family firms to test whether they affect social activities (Zhong and Wu 2021), a concept that is aligned with social value. Family firms is a dummy variable and takes the value of 1 if two or more family members have ownership or management and 0 otherwise.…”

Section: Control Variablesmentioning

confidence: 99%

Driving innovation management to create shared value and sustainable growth

2022

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Creating shared value (CSV) is an opportunity for sustainable growth for small and medium-sized enterprises that entails jointly achieving both social and business value. Currently there are few practical approaches that underpin the importance of CSV and that explore which variables have a positive impact on SMEs. Our paper seeks to shed light on this issue by proposing a measuring and governance model to assess the benefits of CSV in SMEs, using a sample of Spanish SMEs for the empirical analysis, and PLS-SEM as the analysis technique. We first highlight innovation management as a key variable for CSV. It is essential to take innovative strategic decisions to identify which initiatives generate shared value. Our findings confirm that innovative business management helps cultural transformation processes to be implemented with high shared value, which is a source of opportunities in a global economy and, consequently, lead to sustainable growth. Secondly, we aim to highlight how innovative firms enhance their reputation, which in turn has an impact on the creation of social and business value. We also find that if SMEs emphasise social value, they boost the creation of business value, with their role as mediators proving to be vital. We present a strategic management model based on variables such as innovation management, social value and reputation, due to their impact on business value.

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Not all stakeholders are created equal: executive vertical pay disparity and firms’ choice of internal and external CSR

Cited by 20 publications

References 87 publications

Impact of returnee executives and managerial discretion on excess perquisite consumption

Impact of returnee executives and managerial discretion on excess perquisite consumption

Curvilinear effect of economic policy uncertainty on innovation in Chinese manufacturing firms: do managerial pay gaps matter?

Driving innovation management to create shared value and sustainable growth

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