Executives'selling in Chinese listed companies has raised strong concerns from investors,regulatory authorities,so-cial media,and the public in recent years.Although academia has researched the motivation of executives'selling from differ-ent perspectives,many unknown factors still need to be explored thoroughly and deeply.Exploring the impact of the external pay gap on executives'selling from the perspective of executive pay,which has important theoretical value and practical signi-ficance,will help to fully understand the economic consequences of the external pay gap and the regulatory authorities'accur-ate supervision of executives'selling.Based on the management power theory and the effective contract theory,this study empirically tests the effect of the ex-ternal pay gap on executives'selling,analyzes the heterogeneity from the nature of property rights and the transparency of ac-counting information,and further examines the impact of the external pay gap on executives'opportunistic selling.Research-ers select Chinese A-share listed companies from 2007 to 2021 as the research samples,construct a multiple regression model,use the Heckman two-stage model and propensity score matching method to control the possible endogenous problems,and conduct a series of robustness tests to ensure the reliability of the conclusions.The study found that the external pay gap was significantly and positively related to executives'selling.This positive cor-relation was more significant among listed companies with poor transparency and did not show significant differences between state-owned listed companies and non-state-owned listed companies.After a series of robustness tests,the results are robust and reliable.In the extensive test,it was found that compared to executives whose salaries were lower than the industry medi-an,executives whose salaries were higher than the industry median were more likely to engage in opportunistic selling.Moreover,as the external pay gap enlarged,the frequency and scale of opportunistic selling would also increase.Therefore,the external pay gap was the influencing factor that drove executives'selling and carried out opportunistic selling.This study enriches and expands the theoretical research on the economic consequences of the pay gap.It also helps to un-derstand the role of the pay gap in executives'selling decisions.This study provides theoretical support and empirical evidence for CSRC and other regulatory institutions to formulate more targeted policies on executives'selling,which is significant for safeguarding minority shareholders and promoting the healthy development of the capital market.It also provides decision-making reference to formulate fair policies for income distribution,cultivate and improve the professional manager market,and establish a reasonable manager talent discovery mechanism and pay-formulation mechanism.
external pay gapexecutives'sellingexecutives'compensationopportunismaccounting information transparency
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