IDEAS home Printed from https://ideas.repec.org/a/eee/worbus/v44y2009i1p85-93.html
   My bibliography  Save this article

Compensation disparity between locals and expatriates: Moderating the effects of perceived injustice in foreign multinationals in China

Author

Listed:
  • Leung, Kwok
  • Zhu, Yongxin
  • Ge, Cungen

Abstract

A large compensation gap exists between local and expatriate employees in foreign multinationals in China. A survey in the Suzhou area confirmed that local employees regarded their compensation vis-à-vis that of expatriates as unfair. Trustworthiness of expatriates by locals showed a stronger effect on their evaluation of expatriates than on their job satisfaction and organizational commitment, whereas perceived compensation received by locals showed the opposite pattern. Trustworthiness of expatriates moderated the negative effect of perceived distributive injustice on evaluation of expatriates, whereas perceived compensation moderated the relationships between perceived distributive injustice and job satisfaction as well as organizational commitment.

Suggested Citation

  • Leung, Kwok & Zhu, Yongxin & Ge, Cungen, 2009. "Compensation disparity between locals and expatriates: Moderating the effects of perceived injustice in foreign multinationals in China," Journal of World Business, Elsevier, vol. 44(1), pages 85-93, January.
    • Handle: RePEc:eee:worbus:v:44:y:2009:i:1:p:85-93
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S109095160800014X
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Evans, Martin G., 1985. "A Monte Carlo study of the effects of correlated method variance in moderated multiple regression analysis," Organizational Behavior and Human Decision Processes, Elsevier, vol. 36(3), pages 305-323, December.
    2. Kwok Leung & Peter B Smith & Zhongming Wang & Haifa Sun, 1996. "Job Satisfaction in Joint Venture Hotels in China: An Organizational Justice Analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 27(5), pages 947-962, December.
    3. Michael Harvey, 1993. "Empirical Evidence of Recurring International Compensation Problems," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 24(4), pages 785-799, December.
    4. Tung, Rosalie L., 1998. "American expatriates abroad: From neophytes to cosmopolitans," Journal of World Business, Elsevier, vol. 33(2), pages 125-144, July.
    5. Ambrose, Maureen L. & Seabright, Mark A. & Schminke, Marshall, 2002. "Sabotage in the workplace: The role of organizational injustice," Organizational Behavior and Human Decision Processes, Elsevier, vol. 89(1), pages 947-965, September.
    6. Kwok Leung & Peter B Smith & Zhongming Wang & Haifa Sun, 1996. "Job Satisfaction in Joint Venture Hotels in China: An Organizational Justice Analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 27(4), pages 947-962, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yadong Luo & Huan Zhang & Juan Bu, 2019. "Developed country MNEs investing in developing economies: Progress and prospect," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(4), pages 633-667, June.
    2. Bonache, Jaime & Zárraga-Oberty, Celia, 2020. "Compensating international mobility in a workers’ cooperative: An interpretive study," Journal of World Business, Elsevier, vol. 55(5).
    3. Leung, Kwok & Wang, Zhongming & Hon, Alice H.Y., 2011. "Moderating effects on the compensation gap between locals and expatriates in China: A multi-level analysis," Journal of International Management, Elsevier, vol. 17(1), pages 54-67, March.
    4. Yang, Jing Yu & Wen, Liang & Volk, Stefan & Lu, Jane Wenzhen, 2022. "Temporal boundaries and expatriate staffing: Effects of parent–subsidiary work-time overlap," Journal of World Business, Elsevier, vol. 57(6).
    5. Michael Nippa & Jeffrey J Reuer, 2019. "On the future of international joint venture research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(4), pages 555-597, June.
    6. Hon, Alice H.Y. & Lu, Lin, 2015. "Are we paid to be creative? The effect of compensation gap on creativity in an expatriate context," Journal of World Business, Elsevier, vol. 50(1), pages 159-167.
    7. Caligiuri, Paula & Bonache, Jaime, 2016. "Evolving and enduring challenges in global mobility," Journal of World Business, Elsevier, vol. 51(1), pages 127-141.
    8. Gracia Pratama Suryadi & Fajar Cahyo Utomo & Amanda Setiorini, 2022. "The Role of Compensation and Work Environment on Employee Job Satisfaction (A Case Study at Container Terminal)," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(12), pages 674-677, December.
    9. Michailova, Snejina & Fee, Anthony & DeNisi, Angelo, 2023. "Research on host-country nationals in multinational enterprises: The last five decades and ways forward," Journal of World Business, Elsevier, vol. 58(1).
    10. Guercini, Simone & Milanesi, Matilde, 2020. "Heuristics in international business: A systematic literature review and directions for future research," Journal of International Management, Elsevier, vol. 26(4).
    11. Nicola D. Coniglio & Rezart Hoxhaj & Adnan Seric, 2017. "The demand for foreign workers by foreign firms: evidence from Africa," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 153(2), pages 353-384, May.
    12. Marina Anna Schmitz & Fabian Jintae Froese & Anna Katharina Bader, 2018. "Organizational cynicism in multinational corporations in China," Asia Pacific Business Review, Taylor & Francis Journals, vol. 24(5), pages 620-637, October.
    13. Fabrice Lumineau & Marvin Hanisch & Olivier Wurtz, 2021. "International Management as Management of Diversity: Reconceptualizing Distance as Diversity," Journal of Management Studies, Wiley Blackwell, vol. 58(6), pages 1644-1668, September.
    14. Gibson Hosea Munisi & Roy Mersland, 2016. "Ownership, Board Compensation and Company Performance in Sub-Saharan African Countries," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 15(2), pages 191-224, August.
    15. McWha-Hermann, Ishbel & Jandric, Jakov & Cook-Lundgren, Emily & Carr, Stuart C., 2022. "Toward fairer global reward: Lessons from international non-governmental organizations," International Business Review, Elsevier, vol. 31(1).
    16. Kwok Leung & Xiaowan Lin & Lin Lu, 2014. "Compensation Disparity between Locals and Expatriates in China: A Multilevel Analysis of the Influence of Norms," Management International Review, Springer, vol. 54(1), pages 107-128, February.
    17. Yong Suhk Pak & Qinglu Sun & Yi Yang, 2019. "Influences of expatriate managerial styles on host-country nationals’ turnover intention," Asian Business & Management, Palgrave Macmillan, vol. 18(4), pages 263-280, September.
    18. Prithwiraj Choudhury & Kevin Crowston & Linus Dahlander & Marco S. Minervini & Sumita Raghuram, 2020. "GitLab: work where you want, when you want," Journal of Organization Design, Springer;Organizational Design Community, vol. 9(1), pages 1-17, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Leung, Kwok & Wang, Zhongming & Hon, Alice H.Y., 2011. "Moderating effects on the compensation gap between locals and expatriates in China: A multi-level analysis," Journal of International Management, Elsevier, vol. 17(1), pages 54-67, March.
    2. Tae-Yeol Kim & Jeffrey Edwards & Debra Shapiro, 2015. "Social Comparison and Distributive Justice: East Asia Differences," Journal of Business Ethics, Springer, vol. 132(2), pages 401-414, December.
    3. Yidong Tu & Xinxin Lu & Yue Yu, 2017. "Supervisors’ Ethical Leadership and Employee Job Satisfaction: A Social Cognitive Perspective," Journal of Happiness Studies, Springer, vol. 18(1), pages 229-245, February.
    4. Gamble, Jos, 2006. "Introducing Western-style HRM practices to China: Shopfloor perceptions in a British multinational," Journal of World Business, Elsevier, vol. 41(4), pages 328-343, December.
    5. Caligiuri, Paula & Bonache, Jaime, 2016. "Evolving and enduring challenges in global mobility," Journal of World Business, Elsevier, vol. 51(1), pages 127-141.
    6. Bai, Yuntao & Lin, Li & Li, Peter Ping, 2016. "How to enable employee creativity in a team context: A cross-level mediating process of transformational leadership," Journal of Business Research, Elsevier, vol. 69(9), pages 3240-3250.
    7. Jasso, Guillermina & Kotz, Samuel, 2007. "Two Types of Inequality: Inequality Between Persons and Inequality Between Subgroups," IZA Discussion Papers 2749, Institute of Labor Economics (IZA).
    8. Hang Ngo & Sharon Foley & Ming Ji & Raymond Loi, 2014. "Work Satisfaction of Chinese Employees: A Social Exchange and Gender-Based View," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 116(2), pages 457-473, April.
    9. Hon, Alice H.Y. & Lu, Lin, 2015. "Are we paid to be creative? The effect of compensation gap on creativity in an expatriate context," Journal of World Business, Elsevier, vol. 50(1), pages 159-167.
    10. Thau, Stefan & Bennett, Rebecca J. & Mitchell, Marie S. & Marrs, Mary Beth, 2009. "How management style moderates the relationship between abusive supervision and workplace deviance: An uncertainty management theory perspective," Organizational Behavior and Human Decision Processes, Elsevier, vol. 108(1), pages 79-92, January.
    11. Ariño, Africa & Ring, Peter S., 2004. "Role of justice theory in explaining alliance negotiations, The," IESE Research Papers D/534, IESE Business School.
    12. Evans Sokro & Soma Pillay, 2020. "Host Country Nationals’ Attitudes, Social Support and Willingness to Work with Expatriates," Global Business Review, International Management Institute, vol. 21(5), pages 1184-1199, October.
    13. Victor Lau & Yin Wong, 2009. "Direct and Multiplicative Effects of Ethical Dispositions and Ethical Climates on Personal Justice Norms: A Virtue Ethics Perspective," Journal of Business Ethics, Springer, vol. 90(2), pages 279-294, December.
    14. Michael Nippa & Jeffrey J Reuer, 2019. "On the future of international joint venture research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(4), pages 555-597, June.
    15. Michailova, Snejina & Fee, Anthony & DeNisi, Angelo, 2023. "Research on host-country nationals in multinational enterprises: The last five decades and ways forward," Journal of World Business, Elsevier, vol. 58(1).
    16. Luo, Yadong, 2009. "From gain-sharing to gain-generation: The quest for distributive justice in international joint ventures," Journal of International Management, Elsevier, vol. 15(4), pages 343-356, December.
    17. Au, Kevin Y. & Fukuda, John, 2002. "Boundary spanning behaviors of expatriates," Journal of World Business, Elsevier, vol. 37(4), pages 285-296, January.
    18. Peng, Mike W. & Lu, Yuan & Shenkar, Oded & Wang, Denis Y. L., 2001. "Treasures in the China house: a review of management and organizational research on Greater China," Journal of Business Research, Elsevier, vol. 52(2), pages 95-110, May.
    19. Jing Yang & Frank Tipton & Jiatao Li, 2011. "A review of foreign business management in China," Asia Pacific Journal of Management, Springer, vol. 28(3), pages 627-659, September.
    20. Alexander Newman & Ingrid Nielsen & Russell Smyth & Angus Hooke, 2015. "Examining the Relationship Between Workplace Support and Life Satisfaction: The Mediating Role of Job Satisfaction," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 120(3), pages 769-781, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:worbus:v:44:y:2009:i:1:p:85-93. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/620401/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.