Same or Different? The CEO Labour Market in China's Public Listed Companies

Alex Bryson,Minghai Zhou,John Forth

doi:10.1111/ecoj.12107

Abstract

Using linked employer–employee data for all China's public listed firms over the period 2001–10, we find top executive compensation exhibits many of the traits familiar in the Western literature, although sometimes in a more muted way, and with some clear exceptions. We also find a role for managerial power in executive pay setting which may reflect the recency of the stock market and regulations underpinning corporate governance. Nevertheless, there appear to be some elements of executive compensation which transcend national economic, political and cultural differences. The implication is that the Western model is not as idiosyncratic as critics suggest.

Highlights

As Xu (2011, p. 1117) points out when describing the growth and development of the Chinese economy: ‘The most important non-state sector until the mid-1990s was the Township-Village Enterprises... [which]... accounted for about four-fifths of the output of the non-state sector’
To establish whether the influences on top executive compensation are similar or different to those identified in the literature for firms in Western economies, we present descriptive and multivariate analyses using methodologies and model specifications that are similar or identical to those in the literature
Using panel data for all China’s public listed firms over the period 2001–10 we show that executive compensation responds to market factors in much the same way as it does in Western economies

Summary

Introduction

As Xu (2011, p. 1117) points out when describing the growth and development of the Chinese economy: ‘The most important non-state sector until the mid-1990s was the Township-Village Enterprises... [which]... accounted for about four-fifths of the output of the non-state sector’. Accounted for about four-fifths of the output of the non-state sector’. 1117) points out when describing the growth and development of the Chinese economy: ‘The most important non-state sector until the mid-1990s was the Township-Village Enterprises... These collectively owned enterprises continue to play an important role in production, the public listed sector has been the engine of China’s economic growth for over a decade. In 2001, the public listed sector accounted for 14% of China’s GDP. Over the decade to 2010 the total output of the public listed sector increased nearly eightfold such that, by 2010, it accounted for 43% of China’s GDP.

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