The belt and road initiative and the executive compensation contract: evidence from Chinese security market

ABSTRACT

Extant research mainly focus on the impact of the BRI on the macro-economy. More importantly, the BRI should also have a profound impact on the real economy, but this string of literature is still lacking. Our study will explore the governance effect of the BRI from the perspective of executive compensation. We found that the BRI has improved the effectiveness of executive compensation contract significantly and that this governance effect is more pronounced in enterprises where the power of management is lower and in those that face less intensive market competition. The BRI can also improve the effectiveness of executive compensation contract by strengthening supervision and optimizing remuneration contracts.

KEYWORDS:

• The BRI
• executive compensation
• corporate governance
• China

JEL CLASSIFICATION:

• E60
• G30

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work is supported by the Fundamental Research Funds for the Central Universities (No.202011102).