Import Penetration and Executive Compensation

Erik Lie, Keyang (Daniel) Yang and Wei Jiang

The Review of Financial Studies, 2023, vol. 36, issue 1, 281-316

Abstract: We first compare several measures of import penetration and find that total imports, tariffs, and exchange rates are endogenous, while imports from China are largely exogenous. Then we examine the effects of Chinese import penetration on executive compensation of U.S. firms. We document that Chinese import penetration reduces executives’ stock grants and wealth-performance sensitivity, suggesting that competition mitigates agency problems and the need for conventional alignment mechanisms.Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

JEL-codes: F1 J33 L1 M52 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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