Relational Incentives in Chinese Family Firms
AbstractThis paper mainly discusses the choice of managerial compensation contracts in Chinese family firms. Relation or guanxi in Chinese language is an important factor that should be considered because it can bring the shirking cost to the relation-based manager and the caring cost to the owner under Chinese-style differential mode of association (“chaxu geju”). Our theoretical analysis shows that under some conditions it is optimal for the owner to choose the efficiency wage contract, and that under other conditions it is optimal for the owner to choose the share-based incentive contract.
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Bibliographic InfoArticle provided by Savez ekonomista Vojvodine, Novi Sad, Serbia in its journal Panoeconomicus.
Volume (Year): 58 (2011)
Issue (Month): 4 (December)
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Web page: http://www.panoeconomicus.rs/
Managerial compensation; Efficiency wage contract; Share-based incentive contract; Relation (Guanxi); Chinese family firm.;
Find related papers by JEL classification:
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
- M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics
- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
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