IDEAS home Printed from https://ideas.repec.org/a/spr/manint/v54y2014i1d10.1007_s11575-013-0190-3.html
   My bibliography  Save this article

Compensation Disparity between Locals and Expatriates in China: A Multilevel Analysis of the Influence of Norms

Author

Listed:
  • Kwok Leung

    (City University of Hong Kong)

  • Xiaowan Lin

    (University of Macau)

  • Lin Lu

    (Shanghai Jiao Tong University)

Abstract

In developing countries, there is a large gap in the compensations of locals and expatriates, which is related to negative attitudes of locals. A multilevel study was conducted in China on the influence of low compensation parity in MNC operations. Findings show that the negative effects of low compensation parity on outcome variables, namely, evaluation of and knowledge sharing with expatriates, as well as job satisfaction and intention to quit, were fully mediated by distributive justice based on a comparison with expatriates. Personal pro-disparity norm regarding low compensation parity played a buffering role and was related to a weaker relationship between compensation parity and comparative distributive justice. Organizational pro-disparity norm showed a similar cross-level buffering effect. Trust climate was related to a weaker relationship between compensation parity and comparative distributive justice, and fully mediated the moderating effect of organizational pro-disparity norm. The findings have important theoretical and managerial implications for mitigating the negative influence of low compensation parity in multinational firms, and point to some important topics for future research on the social integration of locals and expatriates.

Suggested Citation

  • Kwok Leung & Xiaowan Lin & Lin Lu, 2014. "Compensation Disparity between Locals and Expatriates in China: A Multilevel Analysis of the Influence of Norms," Management International Review, Springer, vol. 54(1), pages 107-128, February.
    • Handle: RePEc:spr:manint:v:54:y:2014:i:1:d:10.1007_s11575-013-0190-3
    DOI: 10.1007/s11575-013-0190-3
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11575-013-0190-3
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11575-013-0190-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Fan, Joseph P.H. & Morck, Randall & Xu, Lixin Colin & Yeung, Bernard, 2009. "Institutions and Foreign Direct Investment: China versus the Rest of the World," World Development, Elsevier, vol. 37(4), pages 852-865, April.
    2. B Sebastian Reiche & Anne-Wil Harzing & Maria L Kraimer, 2009. "The role of international assignees' social capital in creating inter-unit intellectual capital: A cross-level model," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(3), pages 509-526, April.
    3. Leung, Kwok & Zhu, Yongxin & Ge, Cungen, 2009. "Compensation disparity between locals and expatriates: Moderating the effects of perceived injustice in foreign multinationals in China," Journal of World Business, Elsevier, vol. 44(1), pages 85-93, January.
    4. Lenard Huff & Lane Kelley, 2003. "Levels of Organizational Trust in Individualist Versus Collectivist Societies: A Seven-Nation Study," Organization Science, INFORMS, vol. 14(1), pages 81-90, February.
    5. Kwok Leung & Peter B Smith & Zhongming Wang & Haifa Sun, 1996. "Job Satisfaction in Joint Venture Hotels in China: An Organizational Justice Analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 27(4), pages 947-962, December.
    6. Jean-Luc Arregle & Louis Hébert & Paul W. Beamish, 2006. "Mode of international entry: The advantages of multilevel methods," Management International Review, Springer, vol. 46(5), pages 597-618, September.
    7. Kwok Leung & Peter B Smith & Zhongming Wang & Haifa Sun, 1996. "Job Satisfaction in Joint Venture Hotels in China: An Organizational Justice Analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 27(5), pages 947-962, December.
    8. Duffy, Michelle K. & Ganster, Daniel C. & Shaw, Jason D. & Johnson, Jonathan L. & Pagon, Milan, 2006. "The social context of undermining behavior at work," Organizational Behavior and Human Decision Processes, Elsevier, vol. 101(1), pages 105-126, September.
    9. Wei He & Chao C. Chen & Lihua Zhang, 2004. "Rewards-Allocation Preferences of Chinese Employees in the New Millennium: The Effects of Ownership Reform, Collectivism, and Goal Priority," Organization Science, INFORMS, vol. 15(2), pages 221-231, April.
    10. Leung, Kwok & Wang, Zhongming & Hon, Alice H.Y., 2011. "Moderating effects on the compensation gap between locals and expatriates in China: A multi-level analysis," Journal of International Management, Elsevier, vol. 17(1), pages 54-67, March.
    11. Anat Rafaeli & Yael Sagy & Rellie Derfler-Rozin, 2008. "Logos and Initial Compliance: A Strong Case of Mindless Trust," Organization Science, INFORMS, vol. 19(6), pages 845-859, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Peltokorpi, Vesa, 2020. "Host Country National Employees’ Prosocial Behavior toward Expatriates in Foreign Subsidiaries: A Common Ingroup Identity Model Perspective," International Business Review, Elsevier, vol. 29(2).
    2. Xiaowan Lin, 2015. "How does procedural justice climate influence individual outcomes? An affective perspective," Asia Pacific Journal of Management, Springer, vol. 32(3), pages 771-800, September.
    3. Xiaowan Lin & Long W. Lam & Lida L. Zhang, 2020. "The curvilinear relationship between job satisfaction and employee voice: Speaking up for the organization and the self," Asia Pacific Journal of Management, Springer, vol. 37(2), pages 587-607, June.
    4. Michailova, Snejina & Fee, Anthony & DeNisi, Angelo, 2023. "Research on host-country nationals in multinational enterprises: The last five decades and ways forward," Journal of World Business, Elsevier, vol. 58(1).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hon, Alice H.Y. & Lu, Lin, 2015. "Are we paid to be creative? The effect of compensation gap on creativity in an expatriate context," Journal of World Business, Elsevier, vol. 50(1), pages 159-167.
    2. Michailova, Snejina & Fee, Anthony & DeNisi, Angelo, 2023. "Research on host-country nationals in multinational enterprises: The last five decades and ways forward," Journal of World Business, Elsevier, vol. 58(1).
    3. Leung, Kwok & Wang, Zhongming & Hon, Alice H.Y., 2011. "Moderating effects on the compensation gap between locals and expatriates in China: A multi-level analysis," Journal of International Management, Elsevier, vol. 17(1), pages 54-67, March.
    4. Michael Nippa & Jeffrey J Reuer, 2019. "On the future of international joint venture research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(4), pages 555-597, June.
    5. Yadong Luo & Huan Zhang & Juan Bu, 2019. "Developed country MNEs investing in developing economies: Progress and prospect," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(4), pages 633-667, June.
    6. Yidong Tu & Xinxin Lu & Yue Yu, 2017. "Supervisors’ Ethical Leadership and Employee Job Satisfaction: A Social Cognitive Perspective," Journal of Happiness Studies, Springer, vol. 18(1), pages 229-245, February.
    7. Gamble, Jos, 2006. "Introducing Western-style HRM practices to China: Shopfloor perceptions in a British multinational," Journal of World Business, Elsevier, vol. 41(4), pages 328-343, December.
    8. Caligiuri, Paula & Bonache, Jaime, 2016. "Evolving and enduring challenges in global mobility," Journal of World Business, Elsevier, vol. 51(1), pages 127-141.
    9. Bai, Yuntao & Lin, Li & Li, Peter Ping, 2016. "How to enable employee creativity in a team context: A cross-level mediating process of transformational leadership," Journal of Business Research, Elsevier, vol. 69(9), pages 3240-3250.
    10. Hongjuan Zhang & Liang Wang & Rong Han, 2019. "The China-West divide on social capital: A meta-analysis," Asia Pacific Journal of Management, Springer, vol. 36(3), pages 745-772, September.
    11. Harvey, Michael & Reiche, B. Sebastian & Moeller, Miriam, 2011. "Developing effective global relationships through staffing with inpatriate managers: The role of interpersonal trust," Journal of International Management, Elsevier, vol. 17(2), pages 150-161, June.
    12. Victor Lau & Yin Wong, 2009. "Direct and Multiplicative Effects of Ethical Dispositions and Ethical Climates on Personal Justice Norms: A Virtue Ethics Perspective," Journal of Business Ethics, Springer, vol. 90(2), pages 279-294, December.
    13. Jing Yang & Frank Tipton & Jiatao Li, 2011. "A review of foreign business management in China," Asia Pacific Journal of Management, Springer, vol. 28(3), pages 627-659, September.
    14. Alexander Newman & Ingrid Nielsen & Russell Smyth & Angus Hooke, 2015. "Examining the Relationship Between Workplace Support and Life Satisfaction: The Mediating Role of Job Satisfaction," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 120(3), pages 769-781, February.
    15. Abby Jingzi Zhou & Émilie Lapointe & Steven Shijin Zhou, 2019. "Understanding mentoring relationships in China: Towards a Confucian model," Asia Pacific Journal of Management, Springer, vol. 36(2), pages 415-444, June.
    16. Su, Steven K. & Morris, Michael W. & Leung, Kwok, 2000. "Justice in the Culturally Diverse Workplace: Problems of Over-Emphasis and Under-Emphasis of Cultural Differences," Research Papers 1658r, Stanford University, Graduate School of Business.
    17. Tae-Yeol Kim & Jeffrey Edwards & Debra Shapiro, 2015. "Social Comparison and Distributive Justice: East Asia Differences," Journal of Business Ethics, Springer, vol. 132(2), pages 401-414, December.
    18. GAO, Wenshu & SMYTH, Russell, 2010. "Job satisfaction and relative income in economic transition: Status or signal?: The case of urban China," China Economic Review, Elsevier, vol. 21(3), pages 442-455, September.
    19. Guillermina Jasso & Samuel Kotz, 2008. "Two Types of Inequality," Sociological Methods & Research, , vol. 37(1), pages 31-74, August.
    20. Luo, Yadong, 2009. "Are we on the same page?: Justice agreement in international joint ventures," Journal of World Business, Elsevier, vol. 44(4), pages 383-396, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:manint:v:54:y:2014:i:1:d:10.1007_s11575-013-0190-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.