Publication Type

Journal Article

Version

acceptedVersion

Publication Date

9-2020

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.

Keywords

asymmetric effect, corporate environmental irresponsibility, corporate environmental responsibility, equity perspective, horizontal pay dispersion, social comparison, tournament effect, vertical pay dispersion

Discipline

Business Law, Public Responsibility, and Ethics | Organizational Behavior and Theory

Publication

Corporate Social Responsibility and Environmental Management

Volume

27

Issue

5

First Page

2354

Last Page

2367

ISSN

1535-3958

Identifier

10.1002/csr.2003

Publisher

Wiley

Embargo Period

5-17-2022

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1002/csr.2003

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