Does geographical location matter for managerial compensation design?
Jing Zhang () and
Jieun Chung ()
Additional contact information
Jing Zhang: University of Alabama in Huntsville
Jieun Chung: Concordia University
Journal of Economics and Finance, 2018, vol. 42, issue 1, No 1, 32 pages
Abstract:
Abstract This paper examines the role of firm location in relation to managers’ compensation structure. We find that managers in remotely located firms have compensation packages with lower pay-for-performance (and pay-for-risk) sensitivity, which suggests that managers in rural areas can exert more influence on their pay and receive a compensation package that is more favorable to them. However, this impact of geographical location on managers’ pay is mitigated by the presence of institutional investors. Last, we find that managers in rural firms take lower risks than their peers in urban firms. Overall, our evidence is in support of managerial entrenchment in rural firms.
Keywords: Managerial compensation; Pay incentives; Geographical location; Risk-taking; Institutional investors (search for similar items in EconPapers)
JEL-codes: G30 J33 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)
Downloads: (external link)
http://link.springer.com/10.1007/s12197-016-9383-5 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:spr:jecfin:v:42:y:2018:i:1:d:10.1007_s12197-016-9383-5
Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/12197/PS2
DOI: 10.1007/s12197-016-9383-5
Access Statistics for this article
Journal of Economics and Finance is currently edited by James Payne
More articles in Journal of Economics and Finance from Springer, Academy of Economics and Finance Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().