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Executives’ poverty experience and internal and external pay disparities: Evidence from China

Jin Huang et al.

China Journal of Accounting Research2026https://doi.org/10.1016/j.cjar.2025.100458article
AJG 2ABDC A
Weight
0.50

Abstract

We show that executives’ early-life poverty experiences reduce both internal (executive–employee) and external (executive–peer) corporate pay disparities. Three mechanisms drive this effect: increased risk aversion in poverty-exposed executives, strategic avoidance of negative media coverage to protect reputation and curtailment of excessive executive perks. The results hold under multiple robustness tests. The poverty–equity link intensifies in state-owned enterprises, eastern-region firms, labor-intensive industries, firms with elevated donations, and firms led by executives with advanced degrees. This pay gap reduction primarily stems from restrained executive compensation, particularly when it exceeds industry benchmarks, rather than increased employee wages. These findings advance behavioral agency theory by revealing how leaders’ socioeconomic origins interact with institutional contexts to reshape compensation systems, offering new insights into inequality management.

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https://doi.org/https://doi.org/10.1016/j.cjar.2025.100458

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@article{jin2026,
  title        = {{Executives’ poverty experience and internal and external pay disparities: Evidence from China}},
  author       = {Jin Huang et al.},
  journal      = {China Journal of Accounting Research},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1016/j.cjar.2025.100458},
}

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Executives’ poverty experience and internal and external pay disparities: Evidence from China

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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