IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2021i21p11797-d664648.html
   My bibliography  Save this article

Are Chinese Executives Rewarded or Penalized by the Operation of High-Speed Railways?

Author

Listed:
  • Yu Chen

    (College of Economics and Management, Zhejiang University of Water Resources and Electric Power, Hangzhou 310018, China)

  • Yuandi Wang

    (Business School, Sichuan University, Chengdu 610064, China)

  • Shan Chen

    (Business School, Sichuan University, Chengdu 610064, China)

Abstract

Emerging transportation infrastructure (e.g., HSR) is considered to be an important influencing factor of executive compensation. Moreover, information asymmetry is a contextual factor that cannot be ignored in the above relationship. Based on signal theory, this study used the group data from 2371 Chinese-listed companies between 1999 and 2018 as the research object. This study regarded the operation of HSR as an exogenous shock, using the time-varying difference-in-difference (DID) method to test whether discrepancies exist in the influence of HSR on executive compensation in different contexts. The results show that the operation of HSR positively affects the executive compensation of enterprises in cities along the line. In addition, compared with state-owned enterprises, the impact of a high-speed railway on executive compensation is particularly significant in private enterprises. Furthermore, compared with well-known enterprises, the impact of high-speed railways on executive compensation is particularly significant in enterprises with low visibility. This study reduced the endogeneity problem and made the results more reliable by treating HSR operation as an exogenous variable. The research conclusions are expected to provide a theoretical basis and management implications for companies in cities along high-speed railways to improve their salary system.

Suggested Citation

  • Yu Chen & Yuandi Wang & Shan Chen, 2021. "Are Chinese Executives Rewarded or Penalized by the Operation of High-Speed Railways?," Sustainability, MDPI, vol. 13(21), pages 1-14, October.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:21:p:11797-:d:664648
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/21/11797/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/13/21/11797/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Wang, Xin, 2012. "Foreign direct investment and innovation in China's e-commerce sector," Journal of Asian Economics, Elsevier, vol. 23(3), pages 288-301.
    2. Gabriel M. Ahlfeldt & Arne Feddersen, 2010. "From periphery to core: economic adjustments to high speed rail," Working Papers 2010/38, Institut d'Economia de Barcelona (IEB).
    3. Dong, Xiaofang & Zheng, Siqi & Kahn, Matthew E., 2020. "The role of transportation speed in facilitating high skilled teamwork across cities," Journal of Urban Economics, Elsevier, vol. 115(C).
    4. Cascetta, Ennio & Cartenì, Armando & Henke, Ilaria & Pagliara, Francesca, 2020. "Economic growth, transport accessibility and regional equity impacts of high-speed railways in Italy: ten years ex post evaluation and future perspectives," Transportation Research Part A: Policy and Practice, Elsevier, vol. 139(C), pages 412-428.
    5. Shaw, Shih-Lung & Fang, Zhixiang & Lu, Shiwei & Tao, Ran, 2014. "Impacts of high speed rail on railroad network accessibility in China," Journal of Transport Geography, Elsevier, vol. 40(C), pages 112-122.
    6. Sampsa Samila & Olav Sorenson, 2011. "Venture Capital, Entrepreneurship, and Economic Growth," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 338-349, February.
    7. Gabriel M Ahlfeldt & Arne Feddersen, 2018. "From periphery to core: measuring agglomeration effects using high-speed rail," Journal of Economic Geography, Oxford University Press, vol. 18(2), pages 355-390.
    8. Xiaofang Dong & Siqi Zheng & Matthew E. Kahn, 2018. "The Role of Transportation Speed in Facilitating High Skilled Teamwork," NBER Working Papers 24539, National Bureau of Economic Research, Inc.
    9. Moyano, Amparo & Martínez, Héctor S. & Coronado, José M., 2018. "From network to services: A comparative accessibility analysis of the Spanish high-speed rail system," Transport Policy, Elsevier, vol. 63(C), pages 51-60.
    10. Nancy Knox Napier & Mark Smith, 1987. "Product diversification, performance criteria and compensation at the corporate manager level," Strategic Management Journal, Wiley Blackwell, vol. 8(2), pages 195-201, March.
    11. Levinson, David M., 2012. "Accessibility impacts of high-speed rail," Journal of Transport Geography, Elsevier, vol. 22(C), pages 288-291.
    12. Ortiz-Molina, Hernan, 2007. "Executive compensation and capital structure: The effects of convertible debt and straight debt on CEO pay," Journal of Accounting and Economics, Elsevier, vol. 43(1), pages 69-93, March.
    13. Volpe Martincus, Christian & Carballo, Jerónimo & Cusolito, Ana, 2017. "Roads, exports and employment: Evidence from a developing country," Journal of Development Economics, Elsevier, vol. 125(C), pages 21-39.
    14. Kedia, Simi & Rajgopal, Shiva, 2009. "Neighborhood matters: The impact of location on broad based stock option plans," Journal of Financial Economics, Elsevier, vol. 92(1), pages 109-127, April.
    15. Chen, Zhenhua & Haynes, Kingsley E., 2015. "Impact of high speed rail on housing values: an observation from the Beijing–Shanghai line," Journal of Transport Geography, Elsevier, vol. 43(C), pages 91-100.
    16. Moshe Givoni, 2006. "Development and Impact of the Modern High‐speed Train: A Review," Transport Reviews, Taylor & Francis Journals, vol. 26(5), pages 593-611, January.
    17. Benjamin Faber, 2014. "Trade Integration, Market Size, and Industrialization: Evidence from China's National Trunk Highway System," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(3), pages 1046-1070.
    18. Jaaskelainen, Mikko & Maula, Markku & Murray, Gordon, 2007. "Profit distribution and compensation structures in publicly and privately funded hybrid venture capital funds," Research Policy, Elsevier, vol. 36(7), pages 913-929, September.
    19. Toby Stuart & Yanbo Wang, 2016. "Who cooks the books in China, and does it pay? Evidence from private, high‐technology firms," Strategic Management Journal, Wiley Blackwell, vol. 37(13), pages 2658-2676, December.
    20. Yu, Haitao & Jiao, Junfeng & Houston, Eric & Peng, Zhong-Ren, 2018. "Evaluating the relationship between rail transit and industrial agglomeration: An observation from the Dallas-fort worth region, TX," Journal of Transport Geography, Elsevier, vol. 67(C), pages 33-52.
    21. Mark Jansen, 2020. "Resolving Information Asymmetry Through Contractual Risk Sharing: The Case of Private Firm Acquisitions," Journal of Accounting Research, Wiley Blackwell, vol. 58(5), pages 1203-1248, December.
    22. Appleton, Simon & Song, Lina & Xia, Qingjie, 2005. "Has China crossed the river? The evolution of wage structure in urban China during reform and retrenchment," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 644-663, December.
    23. Shin‐Ping Lee & Hui‐Ju Chen, 2011. "Corporate governance and firm value as determinants of CEO compensation in Taiwan," Management Research Review, Emerald Group Publishing Limited, vol. 34(3), pages 252-265, March.
    24. Liaoliao Duan & Dongxiao Niu & Weizeng Sun & Siqi Zheng, 2021. "Transportation infrastructure and capital mobility: evidence from China’s high-speed railways," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 67(3), pages 617-648, December.
    25. Acharya, Viral V. & Bharath, Sreedhar T. & Srinivasan, Anand, 2007. "Does industry-wide distress affect defaulted firms? Evidence from creditor recoveries," Journal of Financial Economics, Elsevier, vol. 85(3), pages 787-821, September.
    26. Dong, Xiaofang, 2018. "High-speed railway and urban sectoral employment in China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 116(C), pages 603-621.
    27. Peter F. Kostiuk, 1990. "Firm Size and Executive Compensation," Journal of Human Resources, University of Wisconsin Press, vol. 25(1), pages 90-105.
    28. Chen, Yu & Wang, Yuandi & Hu, Die & Zhou, Zhao, 2020. "Government R&D subsidies, information asymmetry, and the role of foreign investors: Evidence from a quasi-natural experiment on the shanghai-hong kong stock connect," Technological Forecasting and Social Change, Elsevier, vol. 158(C).
    29. Jin, Zhi & Yang, Yinan & Zhang, Liguang, 2021. "Geographic proximity and cross-region merger and acquisitions: Evidence from the opening of high-speed rail in China," Pacific-Basin Finance Journal, Elsevier, vol. 68(C).
    30. Chen, Yu & Gu, Xin & Gao, Yongqiang & Lan, Tian, 2021. "Sustainability with high-speed rails: The effects of transportation infrastructure development on firms’ CSR performance," Journal of Contemporary Accounting and Economics, Elsevier, vol. 17(2).
    31. Mathew L. A. Hayward & Violina P. Rindova & Timothy G. Pollock, 2004. "Believing one's own press: the causes and consequences of CEO celebrity," Strategic Management Journal, Wiley Blackwell, vol. 25(7), pages 637-653, July.
    32. Willigers, Jasper & van Wee, Bert, 2011. "High-speed rail and office location choices. A stated choice experiment for the Netherlands," Journal of Transport Geography, Elsevier, vol. 19(4), pages 745-754.
    33. Christian M. Faller & Dodo zu Knyphausen-Aufseß, 2018. "Does Equity Ownership Matter for Corporate Social Responsibility? A Literature Review of Theories and Recent Empirical Findings," Journal of Business Ethics, Springer, vol. 150(1), pages 15-40, June.
    34. Mejda Dakhlaoui & Marjène Rabah Gana, 2020. "Ownership structure and cost of equity capital: Tunisian evidence," International Journal of Business Governance and Ethics, Inderscience Enterprises Ltd, vol. 14(1), pages 96-121.
    35. Ma, Liya & Niu, Dongxiao & Sun, Weizeng, 2021. "Transportation infrastructure and entrepreneurship: Evidence from high-speed railway in China," China Economic Review, Elsevier, vol. 65(C).
    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. Chen Wang & Jack Strauss & Lei Zheng, 2021. "High-Speed Railway Opening and Corporate Fraud," Sustainability, MDPI, vol. 13(23), pages 1-23, 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. Liaoliao Duan & Dongxiao Niu & Weizeng Sun & Siqi Zheng, 2021. "Transportation infrastructure and capital mobility: evidence from China’s high-speed railways," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 67(3), pages 617-648, December.
    2. Shao, Shuai & Tian, Zhihua & Yang, Lili, 2017. "High speed rail and urban service industry agglomeration: Evidence from China's Yangtze River Delta region," Journal of Transport Geography, Elsevier, vol. 64(C), pages 174-183.
    3. Kang, Meiling & Li, Yucheng & Zhao, Zhongkuang & Song, Min & Yi, Jun, 2023. "Travel costs and inter-city collaborative innovation: Evidence of high-speed railway in China," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 286-302.
    4. Liu, Jingyang & Yang, Haoran, 2023. "Income allocation and distribution along with high-speed rail development in China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 175(C).
    5. Liu, Mengsha & Jiang, Yan & Wei, Xiaokun & Ruan, Qingsong & Lv, Dayong, 2023. "Effect of high-speed rail on entrepreneurial activities: Evidence from China," Socio-Economic Planning Sciences, Elsevier, vol. 87(PA).
    6. Nannan Yu & Tianhang Cui & Si Lv, 2023. "Does the High-Speed Rail Improve Employment in Peripheral Cities? Evidence From China’s Beijing–Shanghai HSR Line," SAGE Open, , vol. 13(4), pages 21582440231, December.
    7. Ma, Liya & Niu, Dongxiao & Sun, Weizeng, 2021. "Transportation infrastructure and entrepreneurship: Evidence from high-speed railway in China," China Economic Review, Elsevier, vol. 65(C).
    8. Duan, Liaoliao & Sun, Weizeng & Zheng, Siqi, 2020. "Transportation network and venture capital mobility: An analysis of air travel and high-speed rail in China," Journal of Transport Geography, Elsevier, vol. 88(C).
    9. Huang, Ying & Xu, Wangtu (Ato), 2021. "Spatial and temporal heterogeneity of the impact of high-speed railway on urban economy: Empirical study of Chinese cities," Journal of Transport Geography, Elsevier, vol. 91(C).
    10. Chang, Zheng & Zheng, Longfei, 2022. "High-speed rail and the spatial pattern of new firm births: Evidence from China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 155(C), pages 373-386.
    11. Liu, Xueli & Jiang, Chunxia & Wang, Feng & Yao, Shujie, 2021. "The impact of high-speed railway on urban housing prices in China: A network accessibility perspective," Transportation Research Part A: Policy and Practice, Elsevier, vol. 152(C), pages 84-99.
    12. Lan, Xiujuan & Hu, Zheneng & Wen, Chuanhao, 2023. "Does the opening of high-speed rail enhance urban entrepreneurial activity? Evidence from China," Socio-Economic Planning Sciences, Elsevier, vol. 88(C).
    13. Baek, Jisun & Park, WooRam, 2022. "The impact of improved passenger transport system on manufacturing plant productivity," Regional Science and Urban Economics, Elsevier, vol. 96(C).
    14. Yang, Xiaolan & Wang, Rui & Guo, Dongmei & Sun, Weizeng, 2020. "The reconfiguration effect of China's high-speed railway on intercity connection ——A study based on media attention index," Transport Policy, Elsevier, vol. 95(C), pages 47-56.
    15. Wu, Bingyu & Levinson, David M., 2024. "A multi-modal analysis of the effect of transport on population and productivity in China," Journal of Transport Geography, Elsevier, vol. 116(C).
    16. (Ato) Xu, Wangtu & Zhou, Jiangping & Yang, Linchuan & Li, Ling, 2018. "The implications of high-speed rail for Chinese cities: Connectivity and accessibility," Transportation Research Part A: Policy and Practice, Elsevier, vol. 116(C), pages 308-326.
    17. Yahong Liu & Daisheng Tang & Tao Bu & Xinyuan Wang, 2022. "The spatial employment effect of high-speed railway: quasi-natural experimental evidence from China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 69(2), pages 333-359, October.
    18. Haoran Zhang & Ying Chai & Xuyu Yang & Wenli Zhao, 2022. "High-Speed Rail and Urban Growth Disparity: Evidence from China," Sustainability, MDPI, vol. 14(13), pages 1-13, July.
    19. Federico Cavallaro & Francesco Bruzzone & Silvio Nocera, 2023. "Effects of high-speed rail on regional accessibility," Transportation, Springer, vol. 50(5), pages 1685-1721, October.
    20. Kim, Hyojin & Sultana, Selima & Weber, Joe, 2018. "A geographic assessment of the economic development impact of Korean high-speed rail stations," Transport Policy, Elsevier, vol. 66(C), pages 127-137.

    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:gam:jsusta:v:13:y:2021:i:21:p:11797-:d:664648. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.