Relative pay and its effects on firm efficiency in a transitional economy

Michael Arthur FIRTH, Tak Yan LEUNG, Oliver M. RUI, Chaohong NA

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

6 Citations (Scopus)

Abstract

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.
Original languageEnglish
Pages (from-to)59-77
Number of pages19
JournalJournal of Economic Behavior and Organization
Volume110
DOIs
Publication statusPublished - 1 Feb 2015

Fingerprint

Firm efficiency
Transitional economies
Productivity
Workers
Firm productivity
Labor
China
Income
Managers
Top management

Keywords

  • Productivity; Top management pay; Relative pay; Transitional economy

Cite this

FIRTH, Michael Arthur ; LEUNG, Tak Yan ; RUI, Oliver M. ; NA, Chaohong. / Relative pay and its effects on firm efficiency in a transitional economy. In: Journal of Economic Behavior and Organization. 2015 ; Vol. 110. pp. 59-77.
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Relative pay and its effects on firm efficiency in a transitional economy. / FIRTH, Michael Arthur; LEUNG, Tak Yan; RUI, Oliver M.; NA, Chaohong.

In: Journal of Economic Behavior and Organization, Vol. 110, 01.02.2015, p. 59-77.

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

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