TY - JOUR
T1 - Relative pay and its effects on firm efficiency in a transitional economy
AU - FIRTH, Michael Arthur
AU - LEUNG, Tak Yan
AU - RUI, Oliver M.
AU - NA, Chaohong
PY - 2015/2/1
Y1 - 2015/2/1
N2 - In this study, we examine the impact of relative pay (manager pay divided by average worker pay) on a firm's productivity. Using data from a major transitional economy, China, we find that relative pay is negatively associated with high productivity. Our results provide support for the view that workers are alienated when their incomes are far lower than that of top management and this leads to lower productivity. This effect is most pronounced in labor intensive firms.
AB - In this study, we examine the impact of relative pay (manager pay divided by average worker pay) on a firm's productivity. Using data from a major transitional economy, China, we find that relative pay is negatively associated with high productivity. Our results provide support for the view that workers are alienated when their incomes are far lower than that of top management and this leads to lower productivity. This effect is most pronounced in labor intensive firms.
KW - Productivity; Top management pay; Relative pay; Transitional economy
UR - http://commons.ln.edu.hk/sw_master/1624
UR - http://www.scopus.com/inward/record.url?scp=84920910025&partnerID=8YFLogxK
U2 - 10.1016/j.jebo.2014.12.001
DO - 10.1016/j.jebo.2014.12.001
M3 - Journal Article (refereed)
SN - 0167-2681
VL - 110
SP - 59
EP - 77
JO - Journal of Economic Behavior and Organization
JF - Journal of Economic Behavior and Organization
ER -