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The effect of upper echelons’ compensation on firm internationalization

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  • Wen-Ting Lin

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  • Kuei-Yang Cheng

    ()

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    Abstract

    This paper is built upon previous work concerning how three factors—an upper echelon’s compensation, the total compensation level of a chief executive officer (CEO), and compensation gaps between a CEO and a top management team (TMT)—affect a firm’s international expansion level. Using longitudinal data (2000–2005) from 528 publicly listed firms in Taiwan as our sample, we found that CEO total compensation level and TMT total compensation were positively related to firms’ international expansion level, and that the larger the compensation gap between CEO and TMT, the higher the given firm’s international expansion level. The implications that these findings have for future research are discussed. Copyright Springer Science+Business Media, LLC 2013

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    File URL: http://hdl.handle.net/10.1007/s10490-011-9261-9
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    Bibliographic Info

    Article provided by Springer in its journal Asia Pacific Journal of Management.

    Volume (Year): 30 (2013)
    Issue (Month): 1 (March)
    Pages: 73-90

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    Handle: RePEc:kap:asiapa:v:30:y:2013:i:1:p:73-90

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    Postal: P.O. Box 17, 3300 AA Dordrecht, the Netherlands
    Web page: http://www.springerlink.com/link.asp?id=106589

    Related research

    Keywords: Firm international expansion level; CEO compensation; TMT compensation; Compensation gap;

    References

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    1. Leone, Andrew J. & Wu, Joanna Shuang & Zimmerman, Jerold L., 2006. "Asymmetric sensitivity of CEO cash compensation to stock returns," Journal of Accounting and Economics, Elsevier, vol. 42(1-2), pages 167-192, October.
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    6. Lawrence F. Katz, 1986. "Efficiency Wage Theories: A Partial Evaluation," NBER Chapters, in: NBER Macroeconomics Annual 1986, Volume 1, pages 235-290 National Bureau of Economic Research, Inc.
    7. Daniel Sullivan, 1994. "Measuring the Degree of Internationalization of a Firm," Journal of International Business Studies, Palgrave Macmillan, vol. 25(2), pages 325-342, June.
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    9. Trevor Buck & Xiaohui Liu & Rodion Skovoroda, 2008. "Top executive pay and firm performance in China," Journal of International Business Studies, Palgrave Macmillan, vol. 39(5), pages 833-850, July.
    10. Hanlon, Michelle & Rajgopal, Shivaram & Shevlin, Terry, 2003. "Are executive stock options associated with future earnings?," Journal of Accounting and Economics, Elsevier, vol. 36(1-3), pages 3-43, December.
    11. Araujo, Luis & Rezende, Sergio, 2003. "Path dependence, MNCs and the internationalisation process: a relational approach," International Business Review, Elsevier, vol. 12(6), pages 719-737, December.
    12. Alessandro Minichilli & Guido Corbetta & Ian C. MacMillan, 2010. "Top Management Teams in Family-Controlled Companies: 'Familiness', 'Faultlines', and Their Impact on Financial Performance," Journal of Management Studies, Wiley Blackwell, vol. 47(2), pages 205-222, 03.
    13. Main, Brian G M & O'Reilly, Charles A, III & Wade, James, 1993. "Top Executive Pay: Tournament or Teamwork?," Journal of Labor Economics, University of Chicago Press, vol. 11(4), pages 606-28, October.
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