|
|
Executives' Pay Gap, Cash Holdings and Market Value Based on the Comparison of Different Property Rights |
HU Yafeng1,LI Rui2,FENG Ke3 |
1.School of Public Policy & Management, Tsinghua University
2.School of Management and Economics, University of Electronic Science and Technology
3.School of Economics, Peking University |
|
|
Abstract The topic of pay gap has attracted wide attention from all walks of life, and scholars at home and abroad have carried out a lot of research on this issue and achieved fruitful results. However, at present, there has been little discussion on how the pay gap of senior executives of listed companies in China affects their cash holdings and its value. Based on this background, the researchers take the annual data of China's A-share non-financial listed companies from 2005 to 2018 as a research sample, and empirically examine the impact of the senior executives' pay gap of different property rights companies on cash holdings and the value. The results show thatthe pay gap between senior executives in state-owned enterprises increases the amount of cash holdings and reduces the value of cash holdings. The pay gap between senior executives in private enterprises reduces the amount of cash holdings, but increases the value of cash holdings. The robustness test shows that the conclusion in the article is still valid. Further analysis shows that the senior executives' pay gap of stateowned enterprises is more inclined to increase cash accumulation from internal cash flow, and at the same time leads to an increase in the level of excessive investment. The senior executives' pay gap of private enterprises reduces the internal cash flow for cash accumulation, and has no significant impact on the level of over-investment. From the above results, it can be concluded that the impact on cash holdings by the pay gap of senior executives in stateowned enterprises supports the theory of social comparison and in private enterprises supports the theory of tournaments.
|
Received: 20 June 2021
Published: 15 September 2021
|
|
Corresponding Authors:
HU Yafeng
E-mail: huyf2019@econ.pku.edu.cn
|
|
|
|
|
|
|