RESEARCH ARTICLE
Minding the gap: Asymmetric effects of pay dispersion on stakeholder engagement in corporate environmental (Ir)responsibility
Ying Zhang,
Li Tong,
Ji Li,
Corresponding Author
Ying Zhang
School of Management, Northwestern Polytechnical University, Xi'an, China
Correspondence
Ying Zhang, School of Management, Northwestern Polytechnical University, Xi'an, China.
Email: zhangyingmgt@nwpu.edu.cn
Search for more papers by this authorLi Tong
Department of Strategic Management & Organization, Singapore Management University, Singapore
Search for more papers by this authorJi Li
Department of Human Resource Management, Dongbei University of Finance and Economics, Dalian, China
Search for more papers by this authorYing Zhang,
Li Tong,
Ji Li,
Corresponding Author
Ying Zhang
School of Management, Northwestern Polytechnical University, Xi'an, China
Correspondence
Ying Zhang, School of Management, Northwestern Polytechnical University, Xi'an, China.
Email: zhangyingmgt@nwpu.edu.cn
Search for more papers by this authorLi Tong
Department of Strategic Management & Organization, Singapore Management University, Singapore
Search for more papers by this authorJi Li
Department of Human Resource Management, Dongbei University of Finance and Economics, Dalian, China
Search for more papers by this authorFunding information: Fundamental Research Funds for the Central Universities, Grant/Award Number: 3102019XJS03; National Natural Science Foundation of China, Grant/Award Number: 71932007; Natural Science Basic Research Plan in Shaanxi Province of China, Grant/Award Number: 2020JQ-227
Abstract
How does pay dispersion affect corporate environmental performance? Building on the tournament effect and equity perspective, we theorize that vertical pay dispersion and horizontal pay dispersion can impinge on corporate environmental performance. We develop the theoretical argument that vertical pay dispersion is negatively related to corporate environmental responsibility (CER) and positively related to corporate environmental irresponsibility (CEIR) due to the tournament competition among executives, and that horizontal pay dispersion is negatively related to CER and positively related to CEIR due to the unjust sense among executives. We then delve into the asymmetric effects of vertical pay dispersion and horizontal pay dispersion on CER and CEIR. We argue that the asymmetric effects result from the difference in social comparison. We find strong empirical support for our predictions. Implications for the development of the literature on pay dispersion and corporate environmental performance are discussed.
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