Abstract

Based on the basic theory of labor market and compensation incentive, this paper deduces the impact of compensation marketization on the performance of financing platform, discusses the differential effect of compensation marketization on the performance of financing platforms under different regional conditions, and puts forward the research hypothesis. This paper collected the financial data of 115 financing platforms in Jiangsu and Anhui provinces of China from 2005 to 2020 for empirical analysis. Our research finds that compensation marketization can improve the performance of financing platforms, and this effect will be larger if the financing platform is in a more developed region than in a less developed region. After further research we find that compensation marketization promotes performance by increasing capital turnover and reducing cost stickiness. Also executives’ political background may lead to a higher effect of compensation marketization on financing platform performance.

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