BIROn - Birkbeck Institutional Research Online

    Pay dispersion and bank performance: the role of culture and law

    Yu, Ellen Pei-yi and Luu, Bac Van (2016) Pay dispersion and bank performance: the role of culture and law. Working Paper. Birkbeck College, University of London, London, UK. (Unpublished)

    [img]
    Preview
    Text
    2016 working paper - Pay dispersion and bank performance culture Law - Yu and Luu.pdf

    Download (600kB) | Preview

    Abstract

    We examine the impact of executive pay dispersion on firm performance and valuation in a global sample of banks. The pay dispersion variable is measured using our hand-collected dataset comprised of banks chosen from OECD countries and banks from China and India. Controlling for cultural differences across countries using Hofstede’s four cultural dimensions, we test whether the equity fairness (favouring smaller pay dispersion) or tournament theory (arguing for higher pay dispersion) are better descriptions of the relationship between pay dispersion and performance. We find that the equity fairness theory prevails in most sub-groups of our sample, with the exception of Common Law developed country banks, where there is no significant relationship between pay dispersion and performance or valuation. With regard to the cultural variables, we find for our sample banks in Developed Countries that Individualism is positively associated with market valuation while Uncertainty Avoidance has a negative effect.

    Metadata

    Item Type: Monograph (Working Paper)
    School: School of Business, Economics & Informatics > Economics, Mathematics and Statistics
    Research Centres and Institutes: Accounting and Finance Research Centre
    Depositing User: Ellen Yu
    Date Deposited: 20 Jan 2022 10:21
    Last Modified: 20 Jan 2022 10:21
    URI: https://eprints.bbk.ac.uk/id/eprint/47005

    Statistics

    Activity Overview
    6 month trend
    0Downloads
    6 month trend
    0Hits

    Additional statistics are available via IRStats2.

    Archive Staff Only (login required)

    Edit/View Item Edit/View Item