Are Chinese Executives Rewarded or Penalized by the Operation of High-Speed Railways?

Yu Chen, Yuandi Wang and Shan Chen
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Yu Chen: College of Economics and Management, Zhejiang University of Water Resources and Electric Power, Hangzhou 310018, China
Yuandi Wang: Business School, Sichuan University, Chengdu 610064, China
Shan Chen: Business School, Sichuan University, Chengdu 610064, China

Sustainability, 2021, vol. 13, issue 21, 1-14

Abstract: Emerging transportation infrastructure (e.g., HSR) is considered to be an important influencing factor of executive compensation. Moreover, information asymmetry is a contextual factor that cannot be ignored in the above relationship. Based on signal theory, this study used the group data from 2371 Chinese-listed companies between 1999 and 2018 as the research object. This study regarded the operation of HSR as an exogenous shock, using the time-varying difference-in-difference (DID) method to test whether discrepancies exist in the influence of HSR on executive compensation in different contexts. The results show that the operation of HSR positively affects the executive compensation of enterprises in cities along the line. In addition, compared with state-owned enterprises, the impact of a high-speed railway on executive compensation is particularly significant in private enterprises. Furthermore, compared with well-known enterprises, the impact of high-speed railways on executive compensation is particularly significant in enterprises with low visibility. This study reduced the endogeneity problem and made the results more reliable by treating HSR operation as an exogenous variable. The research conclusions are expected to provide a theoretical basis and management implications for companies in cities along high-speed railways to improve their salary system.

Keywords: high-speed railway; executive compensation; information asymmetry; signal theory (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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