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The paper explores the relationship between executive-employee compensation gap (EECG) and environmental performance, an ignored theoretical gap both in the field of consequences of executive compensation and the field of antecedents of environmental performance, by choosing the panel data consisting of 2320 firm-year observations in Chinese listed manufacturing companies during the period from 2011 to 2013 as the research sample. Empirical analysis based on multiple regression analysis adopting the method of OLS by applying SPSS19.0 provides a critical new finding: EECG has a negative effect on environmental performance, which holds robust with the change of the measures and the change of empirical models. Further investigation on EECG’s effect mechanism on environmental performance suggests that it is the short-termism and utilitarianism derived from extra EECG that can-do harm to environmental performance.

malaysian e commerce journal

AN EXPLORATORY STUDY ON THE RELATIONSHIP BETWEEN EXECUTIVE-EMPLOYEE COMPENSATION GAP AND ENVIRONMENTAL PERFORMANCE: EVIDENCE FROM CHINESE LISTED MANUFACTURING COMPANIES