The Impact of the Compensation Gap between Executives and Employees in Listed Manufacturing Enterprises on Operating Performance: Based on the Mediating Effect of R&D Investment

Debin Yang; Qian Zhou

doi:10.63313/EPP.9024

Authors

Debin Yang Southwest Petroleum University, Chengdu, 610000, China Author
Qian Zhou Southwest Petroleum University, Chengdu, 610000, China Author

DOI:

https://doi.org/10.63313/EPP.9024

Keywords:

Executive staff salary gap, R&D investment, Operating performance

Abstract

The widening pay gap between senior executives and rank-and-file employees in manufacturing firms has drawn widespread public attention. Based on a sample of China's A-share manufacturing listed enterprises from 2018 to 2023, this study first employs stepwise regression to examine the impact of executive-employee pay gap on corporate operating performance. Furthermore, it constructs a mediating effect model to explore the relationships among executive-employee pay gap, R&D investment, and corporate operating performance, and verifies the mediating role of R&D investment. The findings indicate that: (1) Executive-employee pay gap positively promotes the improvement of corporate operating performance; (2) The gap also boosts R&D investment in manufacturing firms; (3) R&D investment plays a partial mediating role in the effect of executive-employee pay gap on corporate operating performance. Finally, the study puts forward policy recommendations, including formulating reasonable pay gap policies, establishing fair and transparent salary communication mechanisms, and increasing R&D investment.

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