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Is Cross-listing Associated with Stronger Executive Incentives? Evidence from China

Author

Listed:
  • Chi, Wei
  • Zhang, Haiyan

Abstract

This 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.

Suggested Citation

  • Chi, Wei & Zhang, Haiyan, 2008. "Is Cross-listing Associated with Stronger Executive Incentives? Evidence from China," MPRA Paper 11649, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:11649
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    File URL: https://mpra.ub.uni-muenchen.de/19241/1/MPRA_paper_19241.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Cross-listing; Executive Compensation; Corporate Governance;
    All these keywords.

    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 - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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