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Department of Economics

CEO's Pay Differentials and the Location of IPOs: An Empirical Study for Chinese A-share and H-share Companies

Speaker Ms. LIU Yi, Jacqueline
MPhil Student
Chief Supervisor Prof. WEI Xiangdong
Co-Supervisor Dr. ZHANG Yifan
Time 2:30p.m. – 3:30p.m.
Date 27 May 2011 (Friday)
Venue SO322, Dorothy Y. L. Wong Building


​According to most research, enterprises benefit from being listed on the stock market. Furthermore, 61 of 1693 mainland firms that went public from Year 1999 to Year 2009 chose to list their stock on Hong Kong Stock Market. We hypothesize that this is the choice affected by the standard level of CEO's salary, especially for CEOs of state-owned enterprises. Within the Hong Kong Market, CEOs could earn higher salary compared to that under the mainland market. Due to the different standard salary, CEOs would like to push companies to list abroad. The expected wage differential may be the motivation for choosing Hong Kong Stock Market for IPOs. We investigate the wages of CEOs which belong to state-owned A-share companies, H-share companies and crosslisting companies. We examine the relationship between firms' listing status and the expected CEO's wage differential of A-share companies and H-share companies. We use Heckman Selection Model to confirm the hypothesis that listing abroad is at least partially the self-selection by CEOs.