Social comparisons of wage increases and job satisfaction

We combine status quo and social comparison considerations and investigate whether relative wage increases in the sense of differences between individual wage increases and wage increases of comparable employees are related to managers’ job satisfaction. Using a panel data set of managers in the German chemical industry, we indeed find first evidence. The relation between relative wage increases and job satisfaction is relevant for managers with lower absolute wage levels in particular.     

Job satisfaction and co-worker pay in Canadian firms

One reason to be concerned about income inequality is the idea that people care about not only their own absolute income but also their income relative to various reference groups (co-workers, friends, neighbours, relatives, etc.). We use Canadian linked employer–employee data to estimate the casual effect of co-worker pay on a worker's reported job and pay satisfaction. Since worker satisfaction can affect the worker's productivity, organizational commitment, turnover, creativity and innovation as well as the firm's productivity and profitability, this is an issue that requires more attention and careful examination. In models that control for a rich set of workplace characteristics, we find that co-worker pay has a large positive and significant effect on both pay and job satisfaction. In our preferred models with establishment-level fixed effects, the effect of co-worker pay on pay satisfaction is half as large and the effect on job satisfaction completely disappears, suggesting that part (all) of what previous studies attribute to the effect of co-worker pay on worker pay (job) satisfaction is driven by unobserved heterogeneity across firms or establishments. Our results also suggest that the effect of co-worker pay on worker satisfaction is much stronger for workers who leave their job during the following year. Finally, we find that while co-worker pay has a positive effect on pay satisfaction among Canadian-born whites, it has a negative effect among immigrants and Canadian-born visible minorities.     

Negotiation over Intellectual Property Rights Protection in a Mixed Market

This article models a North–South negotiation under a mixed oligopolistic setting where a public firm in the South and a private firm from the North compete in the southern market. The southern firm is a public one whose objective is a weighted sum of the South's social welfare and its own profit, whereas the northern firm is a pure profit maximizer. The North provides a quid pro quo in exchange for the strengthening of the enforcement of intellectual property rights (IPR) protection in the South. We show that when the northern and southern firms engage in quantity competition in the southern market, the southern government's optimal choice is either complete protection or complete violation. We show this to depend on the southern government's valuation of the quid pro quo. Moreover, strengthening IPR protection will deepen the privatization process in the South, though it brings about a social welfare loss to the South.     

Is the more able manager always safer from takeover?

It's commonly believed that managers with higher ability would be less likely to be taken over. We set out a model, which is built on Zwiebel (1996), to show that there is no monotonic relationship between manager's ability and the probability of being taken over. A manager with relatively high ability would be taken over since this manager cannot commit to renegotiating debt contract with the creditor after taking on a bad project; anticipating this, the raider would take over the firm and remove the high-ability manager in the first place.     

Connections and performance in bankers’ turnover

In this paper we study the impact of the connections of the top executives (Presidents, CEOs and General Managers) of Italian banks on their turnover and on bank performance. We measure managers’ connections by the kilometer distance between the province of the bank's headquarter and the manager's province of birth. We show that top managers tend to be local in the sense that the distribution of this distance is heavily skewed towards zero. On the basis of this evidence we investigate whether connections affect the duration of the appointment at the bank, and whether connections entrench managers at the expense of the bank's performance. We find that connections generally decrease the probability of bank manager’s turnover, and that the positive effect of performance on tenure is strongly attenuated once connections are taken into account. Furthermore we find that for any bank type performance does not increase with connections. On the contrary, we show that having connected managers hurts performance in Mutual, Cooperative and Rural banks. Overall these findings suggest that connections are collusion devices to share and maintain rents at the expenses of bank performance.     

EFFECTS OF ASYMMETRIC INFORMATION WITHIN A FIRM ON OLIGOPOLISTIC MARKET OUTCOMES

I analyze the implications of the Laffont–Tirole type agency problems on oligopolistic market outcomes. In the model, a firm's marginal cost is decreasing in managerial effort and is subject to an additive shock. Both managerial effort and the realization of the shock are a manager's private information. A firm first offers a menu of contract to its manager, and then competes in the product market. As in the model of single principal and single agent, the incentive contracts implement efforts that are distorted downward relative to full information. In this model, with multiple agency relationships, an additional source for upward distortion of effort emerges as a result of the interaction in the product market. The results are robust to whether firms compete in price or quantity.     

The relationship between job satisfaction and managerial remuneration in small and medium-sized enterprises: an empirical test of ‘comparison income’ and ‘equity theory’ hypotheses

The relationship between job satisfaction levels and the remuneration of non-owner managers employed by a sample of 97 UK small and medium sized enterprises (SMEs) is investigated. The main empirical findings are that relative remuneration levels appear to be largely explained by differences in human capital and job/firm characteristics and that job satisfaction is positively related to deviations from these estimated comparison-income levels. Moreover, the equity theory expectation that individuals with the least prospect of redressing payment inequities will have the greatest incentives to respond to payment inequities by congitive adjustment is also supported. The results indicate that job satisfaction levels for individuals expecting to remain in their current post are not significantly affected by current payment inequities. For those managers who expect to move firms, the amount of payment inequity has a significantly positive effect upon their job satisfaction.     

Dynamic Moral Hazard and Executive Stock Options

This paper shows that the optimal executive compensation scheme in a dynamic moral hazard environment is convex in the firm value. This implies that the optimal contract should include stock options. This is because the private benefit of shirking is increasing in firm value and the manager's utility is concave. Therefore, in contrast to the previous literature that takes stock options in the incentive contract exogenously, we rationalize the optimality of their use endogenously. Moreover, we show that the optimal amount of stock options (restricted stocks) increases with agency cost and the executive's reservation utility, decreases with the degree of risk aversion of the manager, and increases (decreases) with the firm size.     

Scientific personnel reallocation and firm innovation: Evidence from China’s college expansion

Given that the supply of scientific personnel is inelastic, the expansion of public research may negatively influence private research by driving up the wage of scientific personnel and reallocating them away from private sectors. China's massive college expansion since 1999 and labor market segmentation provide us with a unique opportunity to investigate such a reallocation effect on firm innovation. Consistent with the reallocation hypothesis, we find that China's college expansion negatively influenced firm innovation as well as regional innovation in the short run. Moreover, we provide direct evidence on scientific personnel reallocation by finding that when college expansion was more intensive, highly educated laborers were less likely to choose an industrial job, and those working in industries enjoyed a higher wage rate when holding a professional (research related) job.     

JOB FLOWS AND UNEMPLOYMENT IN AN EQUILIBRIUM UNEMPLOYMENT MODEL WITH FIRM‐SPECIFIC SKILL TRAINING*

We introduce productivity enhancing firm‐specific skill training into the labour search model in which the firm‐specific skill training intensity and the job destruction rate are endogenously determined. It is shown that the higher the intensity of such training, the lower the rates of unemployment, job creation and job destruction. The paper's model provides a theoretical framework to understand the often mentioned peculiarity of the Japanese labour market; prevalently low rates of unemployment, job creation and job destruction in Japan are due to its training system which promotes workers to acquire firm‐specific skills.     

DOES SIZE MATTER? THE INFLUENCE OF FIRM SIZE ON WORKING CONDITIONS,JOB SATISFACTION AND QUIT INTENTIONS

Using a detailed survey on Spanish workers, this paper investigates the relationship between firm size and working conditions, the extent to which firm size differences in workers' job satisfaction can be accounted for by differences in their work environment and the impact of firm size on workers' quit intentions. The results indicate that: (1) employees in larger firms face a worse work environment; (2) working in large firms significantly reduces job satisfaction when no controls for working conditions are included, but taking them into account makes differentials across size categories statistically insignificant; and (3) no systematic differences exist in intentions to quit across firm size categories, irrespective of conditioning on wages.     

Learning through experimentation in an oligopoly market with asymmetric information

Unlike previous literature, in which firms compete in the market with the same information, this article analyses a two‐period duopoly game in which only one firm is completely informed about the market conditions, whereas the other firm is unaware of one parameter of the demand curve. In this setting, we describe how the informed firm uses its price set in period 1 in order to reveal or to hide its private information and how the uninformed firm uses its own price in period 1 in order to learn the market conditions when they are not revealed by its rival. Specifically, we obtained the conditions under which the informed firm sets a higher price than its optimum in the first period to hide its private information in certain cases and to reveal that information in others. Likewise, this paper describes the conditions under which the uninformed firm sets a lower price than its optimum in period 1 in order to learn the unknown parameter. We found that the informed firm's cost of revealing its private information to its rival is lower than the uninformed firm's cost of learning the market conditions.     

Management Speaks,Investors Listen: Are Investors Too Focused on Managerial Disclosures?

Market regulators are concerned about the completeness of management-provided explanations in financial reports and other venues. In particular, the Securities and Exchange Commission has articulated the growing problem of firm managers selectively emphasizing information that is favorable to their firm's financial status. In this two-experiment study, we examine whether investors are adversely influenced when firm managers provide only a partial explanation for a firm's financial outcomes, even though the investors have information about all of the causes for a firm's financial outcomes. Our results reveal that investors are misled by partial management explanations. We demonstrate that this effect occurs in situation both when qualitative information is known about the causes and when quantitative information is known about the causes. We document that one way in which this overreliance on management-provided partial information can be mitigated is when investors are provided with a quantitative analysis of the management explanation; with this quantitative analysis we observe that investors are able to distinguish between partial and complete explanations. Our study has implications for regulators and researchers.     

共创价值对顾客忠诚和员工工作绩效的影响

利用对420名消费者的问卷调查数据,运用结构方程模型实证分析了共创价值是如何影响顾客满意和员工工作满意度、进而如何作用于顾客忠诚和员工工作绩效水平的。结果表明:共创价值与顾客满意显著相关,并对顾客满意具有促进作用;顾客满意对顾客忠诚具有促进作用;共创价值与员工工作满意度显著相关,并对员工工作满意度具有促进作用;员工工作满意度对其工作绩效具有促进作用;顾客满意与员工工作绩效显著相关,并对员工工作绩效具有促进作用;员工工作满意度与顾客忠诚显著相关,并对顾客忠诚具有促进作用。     

THE DETERMINANTS OF LATENESS: EVIDENCE FROM BRITISH WORKERS

Using a sample of male and female workers from the 1992 Employment in Britain survey, we estimate a generalised grouped zero‐inflated Poisson regression model of employees' self‐reported lateness. Lateness is higher for males, private sector workers and in service industries. Reflecting theoretical predictions from both psychology and economics, we model lateness as a function of incentives, the monitoring of, and sanctions for, lateness within the workplace, job satisfaction and attitudes to work. Various aspects of workplace incentive and disciplinary policies turn out to affect lateness; however, controlling for these, an important role for job satisfaction remains.     

Investor Protections and Concentrated Ownership: Assessing Corporate Control Mechanisms in the Netherlands

Abstract. The Berle–Means problem – information and incentive asymmetries disrupting relations between knowledgeable managers and remote investors – has remained a durable issue engaging researchers since the 1930s. However, the Berle–Means paradigm – widely dispersed, helpless investors facing strong, entrenched managers – is under stress in the wake of the cross‐country evidence presented by La Porta, Lopez‐de‐Silanes, Shleifer and Vishny, and their legal approach to corporate control. This paper continues to investigate the roles of investor protections and concentrated ownership by examining firm behaviour in the Netherlands. Our within‐country analysis generates two key results. First, the role of investor protections emphasized in the legal approach is not sustained. Rather, firm performance is enhanced when the firm is freed of equity market constraints. Second, ownership concentration does not have a discernible impact on firm performance, which may reflect large shareholders' dual role in lowering the costs of managerial agency problems but raising the agency costs of expropriation.     

Search costs and efficiency: Do unemployed workers search enough?

Many labor market policies affect the marginal benefits and costs of job search. The impact and desirability of such policies depend on the distribution of search costs. In this paper, we provide an equilibrium framework for identifying the distribution of search costs and we apply it to the Dutch labor market. In our model, the wage distribution, job search intensities, and firm entry are simultaneously determined in market equilibrium. Given the distribution of search intensities (which we directly observe), we calibrate the search cost distribution and the flow value of non-market time; these values are then used to derive the socially optimal firm entry rates and distribution of job search intensities. From a social point of view, some unemployed workers search too little due to a hold-up problem, while other unemployed workers search too much due to coordination frictions and rent-seeking behavior. Our results indicate that jointly increasing unemployment benefits and the sanctions for unemployed workers who do not search at all can be welfare-improving.     

Managerial compensation and R&D investments: the role of the external managerial labour market

This paper investigates the importance of the external managerial labour market in the determination of managerial compensation and in the influence of the compensation incentives on a firm’s R&D investments. I design an empirical model including the compensation adjustment regression, of which the focus is the role of the external labour market, and the R&D regression that examines how the compensation incentives derived from the external labour market affect a firm’s R&D intensity. Empirical results suggest that the R&D intensity is positively related to the premium of the actual pay adjustments over the expected pay adjustments based on the external labour market comparisons. The effect of the compensation incentives on the R&D investments is strongest when managers expect pay to decrease but actually experience an increase in pay.     

Does having one’s own place to live make someone more employable?

This article encapsulates the findings of a randomized correspondence test field experiment investigating whether job candidates’ home status influences their employability. More than 2000 employers with vacancies in the Swedish labour market received a job application from a fictitious candidate. A job candidate’s home status (his or her own place to live or temporary housing with a friend) was randomized across employers. Results show that home status indeed affected the number of positive employer responses received by job candidates, mainly in low-skilled occupations. Not having a place to live at the time of the application proved a disadvantage when applying for positions within but an advantage when applying for positions outside the city of residence at the time of the application.     

中国女性企业家的现状与发展前景

中国加入WTO后,产业结构调整为女性企业家的成功提供了更多的机会,但在经济全球化的背景下,金融危机也不可避免地影响着我国经济发展和企业运行,使女企业家的企业遇到了前所未有的考验.本文从我国女企业家生存发展现状入手,分析新经济形式下女性发展的机遇和可能遇到的障碍,提出女企业家应注意解决的几个问题,并指出广大女企业家要刻苦学习市场经济知识、企业管理知识、现代科技知识、WTO知识、法律知识,使自己真正具有现代企业家的战略眼光、改革意识和创新思维能力,同时,更要抓好本企业全体成员的集体学习和群体智力的开发,努力建设学习型企业,实现企业的更好更快发展,并展望了女性企业家的发展前景.