A Study of the Impact of the Internal Pay Gap of Executives on the Financialization of Firms

Abstract

This paper investigates the role of the executive internal pay gap and corporate financialization using a sample of A-share listed non-financial firms in Shanghai and Shenzhen from 2013 to 2022. The regression results show that the executive internal pay gap is negatively related to corporate financialization; the heterogeneity test finds that the inhibitory effect of the executive internal pay gap on corporate financialization is more pronounced in firms whose executives have financial backgrounds and growth periods.