Empirical study on the relationship between executive compensation dispersion and firm performance: the moderating role of technology intensity

摘要

This paper examines the moderating effect of technology intensity on the relationship between executive compensation dispersion (ECD) and firm performance in Chinese manufacturing industry. And the multiple linear regression results do confirm that the relationship between the two is sensitive to technology intensity. Specifically, for the publicly listed manufacturing companies with lower technology intensity in China, ECD plays a tournament role and motivates top managers to achieve higher performance. However, for the publicly listed manufacturing companies with higher technology intensity, ECD does not show any significant effect on firm performance. Our finding suggests that technology intensity negatively moderates the relationship between ECD and firm performance which can reconcile the extant disagreements on performance consequences of ECD among scholars to a large degree. We also draw a conclusion that firms with better performance and higher technology intensity tend to have smaller ECD. Meanwhile, the relationship between technology intensity and firm performance is, on average, negative.