Key subordinate executive-CEO pay gap and firms’ digital transformation: Evidence from China

Fangjie Dai () and Jun Zhou ()
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Fangjie Dai: Wuhan University of Technology, School of Economics
Jun Zhou: Wuhan University of Technology, School of Economics

A chapter in Proceedings of the 2024 9th International Conference on Social Sciences and Economic Development (ICSSED 2024), 2024, pp 203-213 from Springer

Abstract: Abstract The key subordinate executive-CEO pay gap is important for firm growth and business performance. The future growth of firms is what digital transformation is all about. With a sample of Chinese A-share listed companies from 2010-2021, we investigate the effect of the key subordinate executive-CEO pay gap on the firm’s digital transformation. The results show that the key subordinate executive-CEO pay gap promotes the firm’s digital transformation by reducing agency costs. This promoting effect is particularly noticeable in non-high-tech firms and non-duality firms. Compared with the digital technology application type of digital transformation, the key subordinate executive-CEO pay gap has a more visible incentive effect on the fundamental digital technology type of digital transformation in firms.

Keywords: executive pay gap; digital transformation; agency costs; textual analysis (search for similar items in EconPapers)
Date: 2024
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DOI: 10.2991/978-94-6463-459-4_26

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