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The Anglo-American financial influence on CEO compensation in non-Anglo-American firms

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  • Lars Oxelheim

    ([1] Lund Institute of Economic Research, Lund University, Sweden [2] The Research Institute of Industrial Economics (IUI), Stockholm, Sweden [3] 4These authors have contributed equally to this work)

  • Trond Rand�y

    ([1] 3Agder University College and Agder Research, Kristiansand, Norway [2] 4These authors have contributed equally to this work)

Abstract

This study examines the impact of Anglo-American financial markets on CEO compensation. Starting from a sample of Norwegian and Swedish listed firms, we analyse this effect as manifested in the capital market (Anglo-American cross-listing) and in the market for corporate control (Anglo-American board membership). These effects are analysed together with the geographically broader effect of the product and service market internationalisation of the firm. We conclude that all three effects contribute positively to the level of CEO compensation. We argue that the higher CEO compensation found in firms exposed to Anglo-American financial influence – as compared with firms not subject to such influence – reflects institutional contagion, the demand for and supply of viable CEO candidates, and a pay premium for increased risk of dismissal. Journal of International Business Studies (2005) 36, 470–483. doi:10.1057/palgrave.jibs.8400144

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Bibliographic Info

Article provided by Palgrave Macmillan in its journal Journal of International Business Studies.

Volume (Year): 36 (2005)
Issue (Month): 4 (July)
Pages: 470-483

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Handle: RePEc:pal:jintbs:v:36:y:2005:i:4:p:470-483

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Cited by:
  1. Hearn, Bruce, 2014. "Institutional impact on the expropriation of private benefits of control in North Africa," Research in International Business and Finance, Elsevier, vol. 30(C), pages 1-23.
  2. Lam, Kevin C.K. & McGuinness, Paul B. & Vieito, João Paulo, 2013. "CEO gender, executive compensation and firm performance in Chinese‐listed enterprises," Pacific-Basin Finance Journal, Elsevier, vol. 21(1), pages 1136-1159.
  3. Liu, Xiaohui & Lu, Jiangyong & Chizema, Amon, 2014. "Top executive compensation, regional institutions and Chinese OFDI," Journal of World Business, Elsevier, vol. 49(1), pages 143-155.
  4. Gerwin Laan & Hans Ees & Arjen Witteloostuijn, 2010. "Is pay related to performance in The Netherlands? An analysis of Dutch executive compensation, 2002–2006," De Economist, Springer, vol. 158(2), pages 123-149, June.
  5. Vaaler, Paul M. & Schrage, Burkhard N., 2006. "Legal System and Rule of Law Effects on US Cross-Listing to Bond by Emerging-Market Firms," Working Papers 06-0126, University of Illinois at Urbana-Champaign, College of Business.
  6. Oxelheim, Lars & Randoy, Trond, 2013. "Globalization of Monitoring Practices: The Case of American Influences on the Dismissal Risk of European CEOs," Working Paper Series 958, Research Institute of Industrial Economics.
  7. Oxelheim, Lars & Randoy, Trond & Stonehill, Arthur, 2011. "What Can International Finance Add to International Strategy?," Working Paper Series 888, Research Institute of Industrial Economics.
  8. Oxelheim, Lars & Randøy, Trond, 2013. "Globalization of monitoring practices: The case of American influences on the dismissal risk of European CEOs," Journal of Economics and Business, Elsevier, vol. 70(C), pages 3-15.
  9. Schmid, Stefan & Dauth, Tobias, 2014. "Does internationalization make a difference? Stock market reaction to announcements of international top executive appointments," Journal of World Business, Elsevier, vol. 49(1), pages 63-77.

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