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| Research on the Impact of Employee Salary Competitiveness on Corporate Risk Taking |
| XIONG Yi，HONG Hong |
| 1. Huazhong Agricultural University, Wuhan, China；2.Wuhan University of Technology, Wuhan, China |
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Abstract Based on the data of A-share listed firms in China from 2007 to 2019, this study investigates the impact of employee salary competitiveness on corporate risk-taking. The results show that the higher level of employee salary competitiveness promotes corporate risk-taking, and which is more pronounced among firms with high levels of R&D intensity, high corporate transparency, and non-SOEs. The mechanism tests indicate that the incentive channel, as well as the reputation channel, dominates the positive nexus between employee compensation incentives and corporate risk-taking. Specifically, increasing employee salary competitiveness leads to more valuable human capital, higher R&D expenditure, and lower cost of capital. The mediation effect test indicates that increasing employee compensation incentives can enhance firm value by promoting corporate risk-taking.
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Received: 18 October 2021
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