An Experimental Research On The Signaling Effect Of Employee Compensation Of The Public

The salaries of staff always attract much attention of the public. In the enterprises, staffs usually play a vitally important role because of their generating the most profits. From the prospective of enterprises, both scholars and entrepreneurs are increasingly concerned about social responsibility with the development of the economic globalization. However, to some extent, the social responsibility of the enterprises would be reflected by the salary level of the staffs. The public often cognize what the enterprise bring to the staffs just by the salary.We wonder that whether the responsibility taken by enterprises for staffs would deliver the similar signal as that produced by capital structure and dividend policy in the stock market? Different from former researches focusing on staff motivation, this paper, in the perspective of enterprise operators, would focus on the influence over the future performance of enterprises exerted by the staff salary, applying the theory of signal transmission. In another word, this paper would study the relationship between the corporate financial performance and the social responsibility, to explore the roles the signal of the employee compensation and benefits plays. Besides, the enterprises often take bets as a commonly used financing method, which plays a vital role for the development of enterprises. Based on that, this paper would also take how the staff salary affecting the debt financing cost into account. Those may bring some inspiration to the enterprises.This paper would analysis the financial data of the listing corporations in Shanghai and Shenzhen A shares, from 2008 to 2014. By establishing linear regression model, we can draw a conclusion that the staff salary does deliver a signal to the outside. When staff salary increases, the enterprises would have good performance. Otherwise, the enterprise performance would usually decline. In addition, we found that there were differences between the stated owned enterprises and non-state-owned enterprises in the performance of staff salary signals.In the meanwhile, the effects of the salary signal was also studied. In this empirical study, we found that reasonable increase of staff remuneration could help enhance the enterprise performance and reduce the cost of debt financing. Besides, we also observed the development inertia in the enterprise performance. All the study results would bring some references to the enterprise operations.