Legislative political connections and CEO compensation in China

Research Article
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Abstract

In this paper, we argue that the characteristics of ties represent a boundary condition of resource-dependency theory for explaining the benefits of political connections. We support this contention with a study of the linkage between CEO compensation and two types of Chinese legislative political ties: the one to the National People’s Congress (NPC) and the other to the Chinese People's Political Consulative Committee (CPPCC). We find that political ties do not necessarily provide access to critical resources and guarantee higher compensation. Our results suggest that the two legislative political ties represent distinct sources of managerial power resulting in different relationships with CEO pay.

Keywords

China CEO Compensation Political connection Resource dependency 

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© Macmillan Publishers Ltd., part of Springer Nature 2018

Authors and Affiliations

  1. 1.Department of ManagementHEC MontrealMontrealCanada
  2. 2.Department of Accounting, Sobey School of BusinessSaint Mary’s UniversityHalifaxCanada

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