Tournaments and managerial incentives in China's listed firms: New evidence

Abstract

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Managerial ownership, corporate governance and firms' exporting decisions: evidence from Chinese listed companies

“…4 By contrast, Lin et al (1988) argue that, although the reforms initiated by the government have increased managerial autonomy and intensified competition, due to policy burdens and soft budget constraints, instead of enhancing economic efficiency, they have worsened agency problems in SOEs. 5 Research focused on Chinese listed firms reaches similar conclusions using managerial tournament theory (Chen et al, 2011;Kato and Long, 2011). Specifically, these studies provide evidence suggesting that the winner's price (executive pay) and the pay gap between the highest executive positions (i.e.…”

“…It also contributes to the growing literature on managerial incentives, and in particular managerial ownership, in the context of transition economies (Kato and Long, 2011). …”

“…Specifically, these studies provide evidence suggesting that the winner's price (executive pay) and the pay gap between the highest executive positions (i.e. the first-and second-tier executives) improve firm performance due to enhanced managerial efforts, but that the performance effects of managerial incentives derived from these corporate tournaments is weakened by state ownership and control (Chen et al, 2011;Kato and Long, 2011). 6 Although these changes were gradual and evolutionary compared with those experienced in other transition countries, Walder (2011, p. 23) refers to this as a Chinese version of "managerial revolution".…”

Managerial power theory, tournament theory, and executive pay in China

“…An added feature of our study is that previous tournament theory studies of China (e.g. Lin and Lu, 2009;Kato and Long, 2010) use the average pay of the three highest paid executives, because until recently many companies did not disclose individual executive pay. In contrast, we use actual pay for each of the three highest paid executives for all disclosing Chinese listed companies, 1999Chinese listed companies, -2009.…”

Institutional reforms and development of corporate governance and banking system in China

“…Yet, state ownership and control in former SOEs hinders the use of modern governance mechanisms such as managerial ownership (Conyon and He, 2011;Kato and Long, 2011;R.Vijayakumaran, 2014;Dixon, Guariglia and Vijayakumaran, 2015;S.Vijayakumaran, 2016). However, after three decades of reform, managerial ownership has emerged as one of ISSN 1946-052X 2017 the important governance mechanisms at least in non-state/private Chinese listed firms (Conyon and He, 2011;Walder, 2011;R.Vijayakumaran, 2014;Dixon, Guariglia and Vijayakumaran, 2015;S.Vijayakumaran, 2016).…”