Relative Earnings and Firm Performance: Evidence from Publicly-listed Firms in China, 2005-2012

Peiwen Bai and Wenli Cheng

No 51-14, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: This paper studies the relationship between three measures of relative earnings and firm performance based on data of 664 listed manufacturing companies in China over the period 2005-2012. It finds that (1) capital earnings relative to labor earnings and the overall average wage level relative to a firm’s average wage level had negative effects on firm performance; (2) the earnings of high-level managers relative to ordinary workers had a positive impact on firm performance; and (3) the effects of relative earnings on firm performance differed across regions, industry characteristics, and firm ownership structures, and over different time periods.

Keywords: relative income share of capital and labor; relative earnings of management and workers; relative wage; firm performance in China (search for similar items in EconPapers)
JEL-codes: D24 J31 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2014-11
New Economics Papers: this item is included in nep-bec, nep-cna, nep-eff, nep-hrm, nep-sbm and nep-tra
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Related works:
Journal Article: Relative earnings and firm performance: Evidence from publicly-listed firms in China, 2005–2012 (2020)
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