Anti-Monopoly And The Internal Pay Gap

With the advance of economic marketization,competition is of real significance to optimize resource allocation and guarantee economic prosperity.In order to mobilize the vitality of the market,the competition mechanism must be improved.The outline of the 14th Five-Year Plan regards strengthening the basic position of competition policy as one of the three major contents of building a high-standard market system.Competition policy refers to all the means to ensure market competition.Anti-Monopoly Law of the People’s Republic of China was applied to safeguard fair competition order,stimulate the market vigor and improve people’s well-being.Its content around the monopoly agreements,concentration of undertakings,abuse of dominant market position and administrative monopoly,all of the above four unfair competition behavior.By banning the above unreasonable monopolistic behaviors,the institutional malpractice that encourages enterprise inertia will be greatly eliminated,force enterprises to innovate constantly and improve the quality of supply.Thus we can protect fair market competition,improve overall economic efficiency,and safeguard public interests.This paper aims to study the impact of the implementation of the Anti-Monopoly Law on the micro enterprises.It can provide some valuable evidence for the regulatory authorities on the amendment and enforcement of the Anti-Monopoly Law.The issue of internal compensation distribution is an important part of enterprise management,which is related to whether an enterprise can achieve its goals and long-term development.Therefore,this paper takes the competition policy of "Anti-monopoly Law" as the starting point and the issue of internal compensation distribution of enterprises asthe foothold to discuss the influence of "Anti-monopoly Law" on the internal compensation gap of enterprises.Firstly,the research background of competition policy,research significance of this topic,research methods and main innovation points of this paper are introduced.Secondly,this paper expounds the institutional background about competition policy and the Anti-Monopoly Law,then this paper reviews the literature on anti-monopoly and internal pay gap and summarizes the existing research results.Thirdly,the research hypothesis of this paper is proposed on the ground of tournament theory,behavior theory,human capital theory and executive power theory.Then this paper empirically examines the change of the executive-employee compensation gap between monopolistic enterprises and competitive enterprises due to the implementation of Anti-Monopoly Law based on the data of A-share listed companies in Shanghai and Shenzhen stock markets from 2005 to 2020 as samples,and adopts a variety of methods to conduct robustness tests.Finally,in the further analysis part,the influence mechanism of the implementation of the Anti-Monopoly Law on the internal pay gap of enterprises is investigated,and the cross-sectional analysis is carried out according to the nature of ownership,and then the relationship between the anti-monopoly Law,the internal pay gap and enterprise performance is investigated.Based on theory analysis and empirical tests,this paper draws the conclusions as follows:(1)In China’s A-share listed companies in Shanghai and shenzhen stock markets,after the implementation of the anti-monopoly law,compared with companies with low monopoly power,the internal pay gap of companies with high monopoly power increases significantly.(2)Further study on the mediating effect shows that the implementation of the Anti-Monopoly Law significantly improves the degree of market competition and volatility of earnings.In a competitive environment,the human capital of executives is more important for the survival and development of enterprises,and their personal contribution is more prominent,thus promoting the increase of the executive-employee compensation gap.(3)The positive effect of the implementation of anti-Monopoly Law on the internal wage gap is significant only in the sample of non-state-owned enterprises,but not in the sample of state-owned enterprises.(4)After the implementation of anti-Monopoly Law,compared with competitive enterprises,the performance of monopoly enterprises decreases significantly,but the widening of internal pay gap can significantly alleviate the negative effect of Anti-Monopoly Law on business performance.It shows that the enforcement of the Anti-Monopoly Law can effectively enhance the degree of market competition and significantly reduce the ability of monopoly enterprises to grab monopoly profits,and the expansion of the internal pay gap can promote the compensation incentive effect,to some extent,alleviate the negative impact of Anti-Monopoly Law on the performance of monopoly enterprises.