IDEAS home Printed from https://ideas.repec.org/a/taf/rcjaxx/v3y2015i2p87-108.html
   My bibliography  Save this article

Political ranks, incentives and firm performance

Author

Listed:
  • Shangkun Liang
  • Zhen Li
  • Donghua Chen
  • Shimin Chen

Abstract

Managers in China’s state-owned enterprises (SOEs) keep their ranks within a political hierarchy system either explicitly or implicitly, and enjoy different kinds of welfare affiliated to these ranks. In this paper, we analyse how the political rank system works as an incentive on the managers of SOEs and empirically examine the effect of political hierarchy on firm performance. We find that the higher is the political rank of a firm’s manager, the better the firm performs. We further find that managers’ cash compensation does not increase with their political rank, suggesting that political rank provides incentives in addition to cash compensation.

Suggested Citation

  • Shangkun Liang & Zhen Li & Donghua Chen & Shimin Chen, 2015. "Political ranks, incentives and firm performance," China Journal of Accounting Studies, Taylor & Francis Journals, vol. 3(2), pages 87-108, April.
    • Handle: RePEc:taf:rcjaxx:v:3:y:2015:i:2:p:87-108
    DOI: 10.1080/21697213.2015.1045401
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/21697213.2015.1045401
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/21697213.2015.1045401?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    More about this item

    Statistics

    Access and download statistics

    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:taf:rcjaxx:v:3:y:2015:i:2:p:87-108. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rcja .

    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.