Is Cross-listing Associated with Stronger Executive Incentives? Evidence from China
AbstractThis study examines whether firms incorporated in mainland China benefit from cross-listing in Hong Kong, China. The Hong Kong Stock Market has more stringent governance rules and a better investor protection than the mainland market. Hong Kong companies generally provide strong incentives to executives via equity-based compensation. Have cross-listed companies learned from Hong Kong local firms in adopting strong executive incentives? The evidence from this study suggests that top executive compensation of cross-listed firms is more sensitive to sales growth than mainland firms without cross-listing. However, compared to that of Hong Kong firms, executive pay of cross-listed firms are less sensitive to stock returns. Further study shows that it is necessary to differentiate state and non-state companies among the cross-listed firms, as they exhibit different patterns of executive incentives.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 11649.
Date of creation: Jul 2008
Date of revision:
Cross-listing; Executive Compensation; Corporate Governance;
Find related papers by JEL classification:
- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
- M52 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-25 (All new papers)
- NEP-CNA-2008-11-25 (China)
- NEP-LAB-2008-11-25 (Labour Economics)
- NEP-TRA-2008-11-25 (Transition Economics)
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