Moderating effects on the compensation gap between locals and expatriates in China: A multi-level analysis

Kwok Leung, Zhongming Wang, Hiu Ying Hon

Research output: Journal article publicationJournal articleAcademic researchpeer-review

28 Citations (Scopus)


The large compensation gap between locals and expatriates in developing countries is associated with a number of negative reactions on the part of the former. Drawing on the sense-making perspective, this study adopts a multi-level approach to examine the moderating effect of an inclusive climate initiated by expatriates for locals and firm performance on the negative relationships between disapproval of a compensation gap and several outcome variables. As expected, disapproval of this gap is related to local employees' negative reactions to expatriates and their firms. Consistent with the sense-making perspective, a stronger inclusive climate for locals is related to a less negative relationship between disapproval of the compensation gap and reactions to expatriates, whereas better firm performance is related to a more negative relationship between that disapproval and reactions toward the organization.
Original languageEnglish
Pages (from-to)54-67
Number of pages14
JournalJournal of International Management
Issue number1
Publication statusPublished - 1 Mar 2011


  • Compensation gap
  • Expatriates
  • Firm performance
  • Inclusive climate
  • Multi-level approach
  • Sense-making

ASJC Scopus subject areas

  • Business and International Management
  • Finance
  • Strategy and Management


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