Public attention and executive perks: Evidence from China

Jian Zhang, Yue Yuan, Yinge Zhang and Jian Xu

Finance Research Letters, 2022, vol. 48, issue C

Abstract: This paper investigates the impact of public attention on executive perks. To establish causality, we exploit an exogenous shock in public attention measured by whether the actual controller of the firm appeared on the Rich List in China. Using a difference-in-difference approach, we find that firms with their actual controller on the Rich List generate fewer executive perks than those that are not influenced by the event. Our findings also demonstrate that external information environments and corporate governance can serve as the economic mechanisms. With the increase of public attention, the information asymmetry is reduced and the corporate governance is improved, thus discouraging the executive perks.

Keywords: Public attention; Executive perks; Agency cost; Information asymmetry; China (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:48:y:2022:i:c:s1544612322002483

DOI: 10.1016/j.frl.2022.103010

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