Tournament incentives, age diversity and firm performance
| Autor: | Mao Zhang, Oleksandr Talavera, Shuxing Yin |
|---|---|
| Přispěvatelé: | University of St Andrews. School of Management |
| Jazyk: | angličtina |
| Rok vydání: | 2021 |
| Předmět: |
Economics and Econometrics
HG Finance media_common.quotation_subject HD28 Management. Industrial Management Non-CEO executives ComputingMilieux_LEGALASPECTSOFCOMPUTING HG Competition (economics) Promotion (rank) Seniority Seniority (financial) Executive compensation Tournament effect Tournament Age diversity media_common ComputingMilieux_THECOMPUTINGPROFESSION ComputingMilieux_PERSONALCOMPUTING DAS Moderation Incentive HD28 Demographic economics Business human activities Finance Diversity (business) |
| ISSN: | 0927-5398 |
| Popis: | This study introduces a new dimension, age diversity of non-CEO executives, which moderates the relationship between promotion-based tournament incentives, measured as the pay gap between the CEO and non-CEO executives, and firm performance. For a sample of Chinese listed firms from 2005 to 2015, we find that the tournament incentives for non-CEO executives relate positively to firm performance. This relationship is weaker when non-CEO executives are from different age cohorts, whereas the tournament effect is enhanced when non-CEO executives are from the same age cohort. The negative moderation effect of age diversity is more pronounced in state firms and in the Northern China Plain cultural region. The negative moderation effect disappears in firms with CEOs who have overseas experience. We reason that the peer pressure among the similar-aged non-CEO executives enhances the tournament competition and that age hierarchy reduces incentives for younger executives to compete. Our findings have important implications for firms not only in China, but also in countries and regions where seniority is highly valued when setting executive compensation and optimizing organizational structure. Postprint |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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