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Anti-corruption and within-firm pay gap: Evidence from China

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  • Kong, Gaowen
  • Huang, Jiating
  • Ma, Guangyuan

Abstract

In light of the exogenous events surrounding the anti-corruption campaign in China, out study arms to examine the impact of anti-corruption on the within-firm pay gap between executives and employees. Our findings suggest that anti-corruption campaign leads to a reduction in the within-firm pay gap. Meanwhile, out analysis reveals that this effect is particularly notable in large-scale firms, firms with a lower level of media attention, firms operating in competitive industries, and firms operating in poor legal environments. Furthermore, our research highlights that the reduction in the pay gap can be attributed to the alleviation of agent problems through anti-corruption measures. The results of our study underscore the importance of anti-corruption as an external governance factor in reducing the within-firm pay gap and addressing agency problems.

Suggested Citation

  • Kong, Gaowen & Huang, Jiating & Ma, Guangyuan, 2023. "Anti-corruption and within-firm pay gap: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:pacfin:v:79:y:2023:i:c:s0927538x23001075
    DOI: 10.1016/j.pacfin.2023.102041
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