The Research On The Relationship Between Senior Managements’ Wage Dispersion And Firm Performance In State-owned Enterprises

In recent years, senior managements’ incentive problems of state-owned enterprises gradually aroused widespread concern in society, and academic circles also explore the relationship between wage dispersion and firm performance. This paper makes focus on wage dispersion of state-owned enterprises’ senior managements, and explore the relationship between the dispersion and firm performance. Wage dispersion is divided into two aspects, which means internal wage dispersion and external wage dispersion. Firstly, we use descriptive statistical analysis to summarize the current situation and find the features of both internal and external wage dispersion of Chinese state-owned enterprises’ senior managements. Furthermore, by building a simultaneous equation model, we study the relationship between internal or external wage dispersion and firm performance. In addition, divide industries into monopoly industries and competitive industries according to the intensity of product market competition and then compare the relationship between wage dispersion and firm performance in monopoly market with the relationship in competitive market.By theoretical and empirical researches, we get the following conclusions. In state-owned enterprise, the relationship between senior managements’ internal wage dispersion and firm performance is inverse U-shaped relationship, which means firm performance will firstly increase and then decrease as the expansion of internal wage dispersion. In competitive market, internal wage dispersion significantly effects firm performance and the relationship between them is also very significant inverse U-shaped relationship. In monopoly market, the relationship between them becomes positive linear relationship and its significance becomes weaker. Meanwhile the relationship between external wage dispersion and firm performance is significant positive linear relationship. And this positive linear relationship exists in both competitive market and monopoly market. But in competitive market, external wage dispersion pays stronger role in promoting corporate performance, and in monopoly market this influence is relatively weak.