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Asia Pacific Journal of Management
Published in: Asia Pacific Journal of Management 1/2013

01-03-2013

The effect of upper echelons’ compensation on firm internationalization

Authors: Wen-Ting Lin, Kuei-Yang Cheng

Published in: Asia Pacific Journal of Management | Issue 1/2013

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Abstract

This paper is built upon previous work concerning how three factors—an upper echelon’s compensation, the total compensation level of a chief executive officer (CEO), and compensation gaps between a CEO and a top management team (TMT)—affect a firm’s international expansion level. Using longitudinal data (2000–2005) from 528 publicly listed firms in Taiwan as our sample, we found that CEO total compensation level and TMT total compensation were positively related to firms’ international expansion level, and that the larger the compensation gap between CEO and TMT, the higher the given firm’s international expansion level. The implications that these findings have for future research are discussed.
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Footnotes
1
The structural attribute consists of the following two items: foreign assets as a percentage of total assets (FATA) and overseas subsidiaries as a percentage of total subsidiaries (OSTS).
 
2
These variables were loaded as a factor using the “principal component extraction” method and “varimax rotation.”
 
3
This study excluded long-term incentive compensation such as the value of stock options because, in Taiwan, a firm’s annual report does not disclose these data.
 
4
This study includes all industries in Taiwan and classifies them into five categories: construction, heavy manufacturing, light manufacturing, the high-tech industry, and other.
 
5
The maximum value of our sample’s international-expansion level is 2.729 and the minimum is 0. The average FSTS value is .043, the average FATA value is .487, and the average value of geographical dispersion is 1.312.
 
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Metadata
Title
The effect of upper echelons’ compensation on firm internationalization
Authors
Wen-Ting Lin
Kuei-Yang Cheng
Publication date
01-03-2013
Publisher
Springer US
Published in
Asia Pacific Journal of Management / Issue 1/2013
Print ISSN: 0217-4561
Electronic ISSN: 1572-9958
DOI
https://doi.org/10.1007/s10490-011-9261-9

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