-
Journal menu
- General information
- Editorial Board and External Reviewers
- Journal Policies
- Publication Ethics and Malpractice Statement
- Instructions for authors
- Paper reviewing
- Article processing charge
- Feedback from stakeholders
- Journal’s Open Access statement
- Order hard copies of the journal
- 50 most cited papers in the journal
- Statement on the Use of Generative AI
Asymmetric pay-for-performance in Chinese enterprises: Insights from firm-specific and cross-sectional analyses
Download This Article
Cindy Chen 
, Dan He , Jasmine Yur-Austin , Qi Zhang
This work is licensed under a Creative Commons Attribution 4.0 International License.
Abstract
The study examines wage rigidity and its connection to the pay-for-performance sensitivity (PPS) of Chinese chief executive officers (CEOs). We find that Chinese CEOs are compensated for both recurring and non-recurring business gains but are shielded from losses. The asymmetrical effects of gains and losses are differentiated between state-owned enterprises (SOEs) and non-SOEs, as well as between central and local SOEs. By incorporating corporate governance mechanisms, we find that the CEO compensation is aligned with the efficient contracting hypothesis in SOEs, but fails to find evidence in non-SOEs. The data source is the China Stock Market & Accounting Research Database (CSMAR). Our research design involves cross-sectional analyses of 33,166 firm-year observations in Shanghai and Shenzhen stock exchanges from 2005 to 2021 and firm-specific regressions on a sub-sample of 841 firms with a tenure exceeding 15 years.
Keywords: Pay-for-Performance Sensitivity (PPS), Wage Rigidity, State Owned Enterprise (SOE), Corporate Governance, Asymmetric Gain and Loss, Firm Specific Regressions
Authors’ individual contribution: Conceptualization — C.C. and J.Y.-A.; Methodology — D.H. and Q.Z.; Formal Analysis — D.H. and Q.Z.; Investigation — D.H. and Q.Z.; Data Curation — D.H. and Q.Z.; Writing — Original Draft — C.C. and J.Y.-A.; Writing — Review & Editing — C.C. and J.Y.-A.; Visualization — C.C and Q.Z.; Supervision — D.H. and J.Y.-A.; Project Administration — D.H. and J.Y.-A.
Declaration of conflicting interests: The Authors declare that there is no conflict of interest.
JEL Classification: G30, G34, J3
Received: 04.06.2025
Revised: 02.08.2025; 02.09.2025
Accepted: 12.09.2025
Published online: 16.09.2025
How to cite this paper: Chen, C., He, D., Yur-Austin, J., & Zhang, Q. (2025). Asymmetric pay-for-performance in Chinese enterprises: Insights from firm-specific and cross-sectional analyses. Corporate Ownership & Control, 22(3), 84–97. https://doi.org/10.22495/cocv22i3art7
