Internal Wage Dispersion Of Executives,Investment Behavior And Enterprise Performance

In a developed market economy,companies have one major characteristic – the separation of ownership and management rights.As a result of the separation of the two powers,the management has the right to operate,and the shareholders the ownership,whose interests are not completely consistent.When there is a conflict between the interests of the principal and the agent,it would be essential and urgent to figure out how to establish an effective incentive mechanism for the management of the enterprise,which is able to constrain the management's personal profit behavior and encourage the rational agent to act in accordance with the interests of the principal.In recent years,the incentive effect of the wage dispersion has been widely concerned by the society.Many scholars have conducted a lot of research on the relationship between wage dispersion and corporate performance.However,the study of investment behavior-the mediating variable between the wage dispersion and firm performance-is relatively deficient.This paper believes that the broadening of the wage dispersion will to a certain extent affect the investment and financing decisions of enterprises,which in turn influence the performance of enterprises.An excessive wage dispersion on the other side,will also result in non-efficiency investment,which is not conducive to the development of enterprises.Based on the investment behavior as the starting point,this paper reviews and summarizes the correlation between the wage dispersion,investment behavior and corporate performance.This paper has established the influence path of “internal salary gap of executives – investment behavior – enterprise performance”.Then,taking the empirical data of non-financial listed companies from 2008 to 2017 to establish an empirical model for testing research hypotheses.The results show that:(1)There is a significant positive correlation between wage dispersion of senior executives and enterprise performance.Wage dispersion helps to improve enterprise performance.(2)Wage dispersion of senior executives helps management to expand investment behavior.(3)Wage dispersion of senior executives can encourage management to make investment decisions,and then improve corporate performance,that is,investment behavior plays a part in the impact of wage dispersion on corporate performance.Further research findings that as wage dispersion widens,it is more urgent for managers to complete the performance appraisal target.They tend toinvest in intangible assets at the expense of the company's fixed assets investment.What's more,increase wage dispersion of senior executives can improve the investment efficiency of enterprises to a certain extent,but the excessive wage dispersion will lead to inefficient investment behavior.The conclusions of this paper enrich the content of the wage dispersion theory,provide a new perspective for the value effect research,help the enterprise to improve the wage dispersion system,give full play to the management's initiative,improve investment efficiency,and help enterprises to develop better.