Do firms' pension contributions decrease their investment efficiency in Chinese context?

Purpose: This study verifies whether the personal psychological factor of power distance disposition is perceived as conformity or obedience to the parties, triggers unethical pro-organisational behaviour (UPB) and is reinforced by hierarchy and market cultures. Design/methodology/approach: Structural equation model analysis was used to test the hypotheses, and Process macro was used to test the moderating effect rigorously. A survey was conducted from 15 August 2018 to 20 September 2018, and 565 questionnaires were collected for analysis. Findings/results: The effect of power distance orientation (PDO) on UPB was determined by deriving the regression coefficient with the control variable input in the relationship between the independent and dependent variables. Power distance orientation had a significant positive effect on UPB, even after controlling the influence of demographic variables. Pro-organisational members do not refrain from unethical actions when carrying out the tasks assigned by the company. This causal relationship is strengthened when hierarchy and market cultures are reinforced. Practical implications: To instil ethical behaviour in employees, a company must continuously manage the organisational culture and atmosphere, as well as educate and train employees on the company's code of ethics. Originality/value: This study contributes to the limited body of knowledge examining both PDO (i.e. individual psychological factor) and organisational culture (i.e. work environment factor) as factors inducing UPB.Purpose: This research aims to investigate whether increasing the pension contributions of a firm leads to inefficient investments. Design/methodology/approach: Based on the 26 135 observations of the Chinese listed firms, this study employs ordinary least squares models to investigate the relationship between pension costs and inefficient investments. Findings/results: This study shows that Chinese listed firms' pension contribution increments result in fewer investment opportunities and a decreased in investment efficiency. This is insignificant for the more profitable firms and state-owned enterprises. It suggests further that a firm's pension cost is significantly associated with its investment inefficiency, particularly for cash flow dominated and financing-restricted firms. This indicates a negative association between pension contributions and cash flows, and several pension contributions may lead to a cash flow shortage in the firms. Practical implications: For managers, they should improve their investment efficiency within an affordable pension plan; for investors, increasing pension costs potentially decrease their investment returns. Originality/value: Some findings have reference values for some developing countries.