Relative earnings and firm performance: evidence from publicly-listed firms in China, 2005–2012

Peiwen Bai, Wenli Cheng

Research output: Contribution to journalArticleResearchpeer-review

1 Citation (Scopus)


This paper studies the relationship between three measures of relative earnings and firm performance based on data of 664 listed manufacturing companies in China over the period 2005–2012. It finds that a firm's financial performance was (1) negatively associated with the capital to labor earnings ratio in the firm; (2) negatively associated with regional average wage relative to the firm's average wage; and (3) positively associated with the earnings of high-level managers relative to ordinary workers. It also finds that the effects of relative earnings on firm performance differed across regions, industry characteristics and firm ownership structures, and over different time periods.

Original languageEnglish
Pages (from-to)279-290
Number of pages12
JournalInternational Review of Economics and Finance
Publication statusPublished - Mar 2020


  • Capital share
  • Financial performance
  • Firm performance in China
  • Listed companies in China
  • Management pay
  • Relative earnings of management and workers
  • Relative income share of capital and labor
  • Relative wage
  • Wage share

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