How The Pay Gap Between Manager And Employee Impacts Enterprise Performance

After the research on the theory of how the pay gap between managers and between manager and employee impact enterprise performance,I found there are 2 opposite theories: tournament theory and behavior theory.Considering creativity and contribution,I would like to study the 2 theories from a new angle.Therefore,I pay more attention on the independent variable.Former research often uses the gap between senior manager and employee as independent variable and emphasizes “senior manager” indicate manager above general manager.I believe in reality,the chance for common employees being promoted to general manager via their own effort is low.For promoting a senior level manager,subjective factors often impact a lot.Therefore,I choose the pay gap between middle manager and employee as practical independent variable,choose the economic representative factors: ROE,ROA,PE,PB,Tobin Q as dependent variable,choose nature,age,asset,lever,numbers of independent executives,shareholding ratio of the first major shareholder and pay gap multiplying nature as control variables.I use STATA to run regression analysis and get the conclusion: the pay gap between middle manager and employ gets positive correlation with enterprise performance.It accords with tournament theory.However,it does not apply to state-owned enterprise.As a research result,it provides reference theory for managers to make a rule of internal pay gap.