Employee Wages,Employee Behavior And Enterprise Value

Chinese economy has experienced 30 years of rapid development and growth of national wealth,and established export manufacturing economic structure in the global market,the advantages of cheap labor contributed a lot in this process.However,compared with the rapid growth of the gross domestic product(GDP),labor does not fully enjoy the benefits brought about by the rapid economic development in return,employees' income growth is far behind the growth rate of the economy.In recent years,with the new generation of migrant workers into the city to protect their rights consciousness enhancement,combined with the implementation of the family planning policy for 30 years leading to the labor force going declining phenomenon,more companies are beginning to realize the situation of labor supply and demand a major shift in response to this tension,it's vital to obtain steady workforce by good protection of employees' rights.Employees are the sources of creativity,are the important value creators for the enterprise,stable operations and expansion of enterprises are inseparable from the initiative put of employees.And as an economic person,one staff inevitably require companies to offer a considerable pay in return,for his/her contribution to the business intelligence and physical at the same time,and makes further decision on the basis of his/her own satisfaction.Therefore,how to protect employees' legal rights and to motivate them to work hard become the common concern in theory and practice.In recent years,in order to alleviate certain problems of income distribution,government makes more efforts to protect the rights and interests of junior staff,promulgates a series of laws and regulations,reforming the income distribution system to narrow the income gap has become one of the most important tasks in the field of the focus of the current economic reforms.This research is related to papers concerning the general interests of employees.From the perspective of risk compensation lead by capital structure,this study takes "the employee wages-employee behavior-enterprise value" as the main line,treats staff wages as the main object,analyze the impact of wages on employee behavior,and the impact of employees behavior on the enterprise value,thereby the paper determines the importance of salaries for employees,the importance of employees for enterprise.Specifically,firstly,the study therelationship between employee compensation and capital structure,and on this basis,I further examine the different relationship between the two for the companies with different nature of ownership and in different industries with technical features as well as enterprises are under financial distress or not.Secondly,research concerning the relationship between of staff wages and employee behavior,furthermore,I check the difference in the relationship for firms under different ownership and in different industries have technical characteristics,and test the degree of difference between management and staff salaries,leverage-payment sensitivity on the relationship.Thirdly,the relationship between employees behavior and corporate value,and on this basis,examine the difference in the relationship for firms under different ownership and in different industries have technical characteristics.Finally,based on these studies,investigate clearly the economic consequences of employee wages,and examine the origin to determine the the new path that capital structure could affect enterprise value.According to the theoretical analysis and empirical test results,this paper proposes to a series of policy recommendations,which including increasing employees wages,affecting employee behavior(reducing employee turnover,enhancing employee productivity and improving staff knowledge structure)and prompting corporate value.By theoretical analysis and empirical test,the paper documents that,on the whole,employees have certain ability to influence compensations,there is extra compensation based on the risk of financial leverage for the firms,when there is a higher level of leverage,employees will receive some compensations for enterprises financial risk,in order to reduce the cost of human capital bankruptcy risk which is triggered by the representatives of leverage.Employees compensations are important factors influencing their behaviors,the higher salaries,the lower employee turnover ratio,the quality of employees is enhancing with employee productivity;employees behaviors can also affect enterprise value,the higher the turnover rate,the lower employee productivity,the lower staff quality,the smaller enterprise value.The above analysis fully confirms the importance of employees wages and employees subject to the corporate management,it also finds a clear path through which the capital structure impact on corporate value.In summary,the main conclusions of the paper are as follows:1.Capital Structure and Employee WagesFirst,corporate capital structure has a significant positive impact on employee wages,there is human capital risk of bankruptcy protection in Chinese listed companies,enterprises should normalize and standardize this protecting mechanism in an appropriate manner,make sure such compensation and risk are matched.Capital structure implies the bankruptcy costs for the loss of human capital,it combines capital structure and employee wages together which are seemingly not closely related to each other,the loss human capital is increasing with the leverage because of bankruptcy risk,and labor force requires increased payments as a risk compensation mechanism,compensation will be subject to the risk level implied from the capital structure,in other words,there is a correlation between them.This relationship was confirmed in the relevant foreign literature,it has also been effectively inspected in this article.Secondly,the findings indicates a negative correlation between capital structure and employee wages for state-owned enterprise but a positive relationship for the non-state-owned enterprise,which may imply that the employees wages in the state-owned enterprises does not match with their capital structure,institutional factors may be the major cause,which may be the key elements of the income distribution reform.Thirdly,with respect to the non-technical enterprises,the positive impact of capital structure on employee compensation is more pronounced for the high-tech enterprises.In China,non-technical employees professional defense capacity is weaker,the sense of protecting employees interests is greater in high-tech enterprises than non-technical industry,personal characteristics of human capital plays a more critical role in the compensation decision-making mechanism.In addition,compared with the enterprises in financial distress,the relationship between capital structure and employee wages is more pronounced in the non-financial troubled enterprises,Therefore,under the current situation that employee collective bargaining power is generally low,only have the employees increased their investment in human capital,can they improve the bargaining power of wages.2.Employee Wages and Employee BehaviorFirstly,employee turnover ratio turns lower with higher companies payments,the higher employee productivity,the higher quality of the recruited staff.This indicates that employee compensation is an important factor affecting employee behavior.Secondly,the relationship between wages and employee behavior is only documented in the non-state-owned enterprises,but the relationship between the two is not significant instate-owned enterprises,this may imply that there may be some more important factor influence their behavior for the state-owned enterprise employees,such as relatively stable working conditions and lower operating pressure or other hidden benefits in state-owned enterprises.Thirdly,the relationship between employee wages and behavior is significant in the high-tech enterprises,but insignificant in the non-high-tech enterprises.In China,employees in high-tech companies have higher level of human capital and stronger bargaining power,but also has more career aspirations and the pursuit of higher interests and higher standards for self-payment,thus it leads to more significant impact of wages on the employee behavior.Fourth,if there is a huge inherent compensation gap between corporate management and staff,then employees feel unfair and it difficult to change their behavior even if there is an increase of employee wages,their actions will inconsistent with the employees those who are from the enterprises with smaller executives-employees payments gap,so there is no such a relationship in the enterprises with greater executives-employees payments gap.Obviously,higher pay gap is not conducive to enterprise human capital management and wages incentives to effectively play the role.Fifth,combined with the empirical results in the first chapter,leverage influences wages,wages affects employee behavior,companies leverage can have impact on employee behavior through its influence on staff compensation.By setting the leverage-wages sensitive indicators,our findings show that the impact of employee wages on behavior is more pronounced in higher leverage-compensation sensitivity companies.3.Employee Behavior and Enterprises ValueFirst,when the employee turnover rate is increasing,the labor productivity and the quality of employees turn lower,the enterprise value would be significantly reduced.Employee behavior is an important factor affecting the value of the enterprise,so guiding employee behavior plays an important role to enhance corporate value.Second,the relationship between employee behavior and corporate value is only found in the non-state-owned enterprises,but the relationship between the two is not significant in state-owned enterprises,in addition,the relationship between employee behavior and corporate value is significant in the high-tech enterprises,but is insignificant in the non-high-tech enterprises.Finally,the relationship between employee turnover and firmperformance is insignificant in the firms with lower leverage – wages sensitivity,but significant in firms with higher leverage – wages sensitivity.Thesis enriches the literature related to capital structure,employee wages,employee behavior and enterprise value,providing adequate theoretical foundation and empirical evidences for future research,research innovation is shown particularly in the following four aspects:First,the paper extends a new perspective of investigating employee wages,taking capital structure as the origin of the research,and examining the impact on enterprise value in the end,enriching the literature related to capital structure and enterprise value.At present,there are still some in-consistences(positive correlation and negative correlation curve relations)for capital structure and enterprise value,this article take "Capital Structure-employee wages-employee behavior-enterprise value" as the research chain,it confirms that the relationship between capital structure and enterprise value,prompting a new path to test the impact of capital structure on corporate value,to a certain extent,it also confirmed the relationship between capital structure and corporate value,and demonstrates the importance of the capital structure arrangements.Secondly,the thesis enriches the research on the economic consequences of employee wages.Previous studies rarely investigate the economic consequences of employee wages.According to Incentive Theory,the higher wages,the less likely to quit for employees,and employees have more incentives to increase their labor input,talented employees are more likely to be recruited into such enterprises.This paper integrates the above represented actions,places employee behavior as mediating variables and studies indirect causes that employee affect enterprise value,thus enriching the research concerning wages economic consequences.Third,the paper enrich theory presence and integration-related evidence.By investigating the relationship between capital structure and employee wages,the findings confirm the presence of risk compensation theory in the Chinese enterprises;By studying the chain of "employee wages-employee behavior-enterprise value," the paper confirms that stakeholder theory and shareholder value maximization theory are able to keep compatible with each other.On the basis of meeting the interests of stakeholders,it also maximizes enterprise value,which confirms the existence of stakeholder corporate value theory.Fourth,the paper further pays attention to the phenomenon of corporate leverage-wagessensitivity on the basis of empirical research,puts forward a risk-compensation matching problem,and analyzes the impact of this phenomenon on employee wages and employee behavior,employee behavior and corporate value,which offers a solution to improve the pay incentive mechanism.