Moderating effects on the compensation gap between locals and expatriates in China: A multi-level analysis

Kwok Leung, Zhongming Wang and Alice H.Y. Hon

Journal of International Management, 2011, vol. 17, issue 1, 54-67

Abstract: The large compensation gap between locals and expatriates in developing countries is associated with a number of negative reactions on the part of the former. Drawing on the sense-making perspective, this study adopts a multi-level approach to examine the moderating effect of an inclusive climate initiated by expatriates for locals and firm performance on the negative relationships between disapproval of a compensation gap and several outcome variables. As expected, disapproval of this gap is related to local employees' negative reactions to expatriates and their firms. Consistent with the sense-making perspective, a stronger inclusive climate for locals is related to a less negative relationship between disapproval of the compensation gap and reactions to expatriates, whereas better firm performance is related to a more negative relationship between that disapproval and reactions toward the organization.

Keywords: Compensation; gap; Expatriates; Firm; performance; Inclusive; climate; Multi-level; approach; Sense-making (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (4)

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