Abstract
The impact of an industry salary gap on corporate innovation is a topic that has attracted great interest. To enrich and expand research on this topic, this research aims to measure this impact from the perspective of the governance effect. The results show that a salary gap across industries significantly drives enterprise innovation at firms with higher agency costs. According to this result, reducing agency costs is the potential mechanism that drives this effect. In this way, this salary gap can drive enterprise innovation. Also, the results provide further evidence that the industry salary gap drives enterprise innovation. In addition, the driving effect of the industry salary gap on enterprise innovation is more significant in industries experiencing a recession and in enterprises with higher financial issues.
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