 Corporate unity culture and executives' pay-performance sensitivity: Evidence from ChinaRongli Yuan and Na Jiang Pacific-Basin Finance Journal, 2025, vol. 93, issue C Abstract: This study investigates whether corporate unity culture affects executives' pay-performance sensitivity based on Chinese A-share listed firms over the period 2005–2020. Using a text-analysis method, we identify firms characterized by a unity culture. Our results indicate that firms with a unity culture exhibit higher executives' pay-performance sensitivity. This association is robust to a series of endogeneity tests, including controlling for some possible omitted variables, adjusting fixed effects, entropy balancing method, Oster test, instrumental variable approach, and difference-in-differences analysis. Cross-sectional analyses show that the effect of corporate unity culture on executives' pay-performance sensitivity is stronger for firms operating in less competitive industries and those without multiple large shareholders. Finally, we identify that mitigating agency costs appears to be the possible underlying mechanism through which corporate unity culture improves executives' pay-performance sensitivity. Keywords: Corporate unity culture; Pay-performance sensitivity; Agency cost; Executive compensation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:93:y:2025:i:c:s0927538x25002392 DOI: 10.1016/j.pacfin.2025.102902 Access Statistics for this article Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee More articles in Pacific-Basin Finance Journal from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.