Globalization and executive compensation

• 成果类型: Article
• 署名作者: Keller, Wolfgang; Olney, William W.
• 署名单位: National Bureau of Economic Research; University of Colorado System; University of Colorado Boulder; Centre for Economic Policy Research - UK; Williams College
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2020.103408
• 发表日期: 2021
• 关键词: inequality; exports; Foreign direct investment; Executive compensation; Market returns; Rent capture

摘要

This paper finds that globalization is contributing to the rapid increase in executive compensation. Employing comprehensive data on top executives at major U.S. companies, we show that their compensation is increasing with exports and foreign direct investment, as well as firm size and technology. Exogenous export shocks unrelated to managerial decisions also increase executive compensation, and there is little evidence that this is due to increasing market returns to talent. We do find that export shocks primarily affect discretionary forms of compensation of more powerful executives at firms with poor corporate governance, as one would expect if globalization has enhanced rent-capture opportunities. Overall, these results indicate that globalization has played a more central role in the rapid growth of executive compensation and inequality than previously thought. (c) 2020 Elsevier B.V. All rights reserved. Globalization and income inequality are currently two of the most important economic issues, with dissatisfaction about both shaping elections throughout the world. While there is a common perception that these issues are related (as illustrated by the quote above), research has tended to focus on the impact of globalization on blue-collar workers. However, it is growth in high incomes, especially the top 1%, that is contributing to U.S. inequality, as Fig. 1 shows.1 This paper examines the relationship between globalization and growing inequality by focusing on the incomes of top business