Canadian Evidence on the Hourly Paid–Salaried Breakdown: Are Canadian Salaried Workers Missing Too?

Hamermesh (2002 ) documents the unexpected rise in the share of American workers paid by the hour. This paper uses establishment data to show that an even larger increase occurred in Canada. The Canadian increase cannot be explained by changes in industry composition or by changes in worker and job characteristics. It appears that Canadian salaried workers have also “gone missing,” adding to Hamermesh's puzzle and suggesting that a satisfactory explanation should fit both American and Canadian experiences.     

The Effect of Graduated Response Anti‐Piracy Laws on Music Sales: Evidence from an Event Study in France

Despite the problem that filesharing poses to the creative industries, there is little research on the effectiveness of governmental anti‐piracy policies. This study analyzes how the HADOPI ² graduated response law in France affected digital music sales. Using a panel of sales data from the four major labels, we applied a difference‐in‐difference approach, comparing sales trends in France to a control group of European countries. We find that increased consumer awareness of HADOPI caused French iTunes music sales to increase by 22‐25%. The observed sales increase is larger in high piracy genres than low piracy ones, strengthening the causal interpretation of our results.     

Does a long‐term orientation create value? Evidence from a regression discontinuity

Research summary : In this paper, we theorize and empirically investigate how a long‐term orientation impacts firm value. To study this relationship, we exploit exogenous changes in executives' long‐term incentives. Specifically, we examine shareholder proposals on long‐term executive compensation that pass or fail by a small margin of votes. The passage of such “close call” proposals is akin to a random assignment of long‐term incentives and hence provides a clean causal estimate. We find that the adoption of such proposals leads to (1) an increase in firm value and operating performance—suggesting that a long‐term orientation is beneficial to companies—and (2) an increase in firms' investments in long‐term strategies such as innovation and stakeholder relationships. Overall, our results are consistent with a “time‐based” agency conflict between shareholders and managers. Managerial summary : This paper shows that corporate short‐termism is hampering business success. We show clear, causal evidence that imposing long‐term incentives on executives—in the form of long‐term executive compensation—improves business performance. Long‐term executive compensation includes restricted stocks, restricted stock options, and long‐term incentive plans. Firms that adopted shareholder resolutions on long‐term compensation experienced a significant increase in their stock price. This stock price increase foreshadowed an increase in operating profits that materialized after two years. We unpack the reasons for these improvements in performance, and find that firms that adopted these shareholder resolutions made more investments in R&D and stakeholder engagement, especially pertaining to employees and the natural environment. Copyright © 2016 John Wiley & Sons, Ltd.     

Do Changes in Regulation Affect Temporary Agency Workers’ Job Satisfaction?

This paper evaluates how a reform relaxing regulations of the temporary help service sector in Germany affected job satisfaction of male temporary agency workers. We isolate the causal effect of this reform by combining a difference‐in‐difference and matching approach using rich survey data. We find that the regulatory change substantially decreased agency workers’ job satisfaction while leaving regular workers’ job satisfaction unchanged. Further analysis reveals that the negative effect on agency workers’ job satisfaction can be attributed to a decrease in wages and an increase in perceived job insecurity. These results are robust to the use of different specifications and placebo tests.     

Demand Uncertainty,Development Timing and Leasehold Land Valuation: Empirical Testing of Real Options in Residential Real Estate Development

This article develops and tests a long‐dated American call option pricing model for valuing development land under leasehold. We analyze and test option values in ten detailed Hong Kong cases involving purchase, holding, converting and developing land. We also test for optimal exercise of long‐dated American calls using processes based on the optimal trigger ratio feature of the perpetual American call option model. Generally, the empirical results confirm presence of a positive and nontrivial option premium (mean +5.274%) in the cases, and that developers appear to delay exercise to the point predicted by the real options model.     

Economic Citizenship and Workplace Conflict in Anglo‐American Industrial Relations Systems

This article argues that the expansion of individual employment rights is presenting a series of challenges to the collective model of economic citizenship that prevailed in most of the Anglo‐American world during the last century. We examine developments in the management of workplace conflict in Anglo‐American countries to highlight the institutional manoeuvrings that have been taking place to mould the nature of national regimes of employment rights. We argue that Governments almost everywhere are actively seeking to create institutional regimes that weaken the impact of employment legislation and we find that statutory dispute resolution agencies are eagerly trying to develop organizational identities that are aligned with rights‐based employment disputes.     

Competitive forces and strategic choice decisions: an experimental investigation in the United States and Japan

Managers operate in a complex, uncertain environment and tend to form simplified models in order to cope with this environment and make competitive strategic decisions (i.e., cost‐leadership, differentiation, or focus). In this study, we use an experimental design to examine the strategic choice decision‐making process in firms located in the United States and Japan. We develop several main‐effect propositions regarding managerial selection of competitive strategies, depending on the competitive forces (buyer power, threat of substitutes, threat of new firm entry, and high intensity of rivalry) they are facing. We propose a main effect due to country of origin: Japanese managers prefer a cost‐leadership strategy more than American managers do. We also propose several interaction effects regarding cross‐national differences in strategy selection between Japanese and U.S. managers. To test our propositions, we collected experimental data from 316 U.S. executives and 459 Japanese executives. We assessed relative impacts of the competitive forces on strategic decision‐making using a multilevel regression analysis. The research findings indicated that high buyer power and high substitution threat were associated with a preference for cost‐leadership strategies, and Japanese managers were significantly more likely to prefer a cost‐leadership strategy than U.S. managers. We also found that, under conditions of high buyer power, U.S. managers were less likely than Japanese managers to enter a market with a differentiation or focus strategy. We found little support for other interaction hypotheses, suggesting points of similarity between U.S. and Japanese managers. We conclude with a discussion of theoretical and managerial implications of our results. Copyright © 2002 John Wiley & Sons, Ltd.     

Has the “CEO effect” increased in recent decades? A new explanation for the great rise in America's attention to corporate leaders

We introduce a new explanation for one of the most pronounced phenomena on the American business landscape in recent decades: a dramatic increase in attributions of CEO significance. Specifically, we test the possibility that America's CEOs became seen as increasingly significant because they were, in fact, increasingly significant. Employing variance partitioning methodologies on data spanning 60 years and more than 18,000 firm‐years, we find that the proportion of variance in performance explained by individual CEOs, or “the CEO effect,” increased substantially over the decades of study. We discuss the theoretical and practical implications of this finding. Copyright © 2014 John Wiley & Sons, Ltd.     

Does Union Membership Really Reduce Job Satisfaction?

We investigate the effect of union membership on job satisfaction. Using linked employer–employee data from the 1998 British Workplace Employee Relations Survey, we analyse the relationship between the membership decision and overall job satisfaction and satisfaction with pay. In this paper we account for the endogenous selection induced by the sorting of workers into unionized jobs. Controlling for both individual and establishment heterogeneity and explicitly modelling the effect of union status, we find that the marked difference in job satisfaction between unionized and non‐unionized workers disappears, suggesting that a selection effect, rather than a causal effect, characterizes the relationship.     

Welfare Analysis of Regulating Mobile Termination Rates in the U.K.

We develop a calibrated simulation model of the U.K. mobile telephony market and use it to analyze the effects of reducing mobile termination rates (MTR's) as recommended by the European Commission. We find that reducing MTR's is likely to increase both consumer surplus and networks' profits. Depending on the strength of call externalities (i.e., benefits to the recipient of a call), social welfare may increase by as much as £1 billion to £4.6 billion per year. We also use the model to estimate the welfare effects of the 2010 merger between Orange and T‐Mobile and find that the merger led to a substantial reduction in consumer surplus.     

The Diffusion of Employment Practices of US‐Based Multinationals in Europe. A Case Study Comparison of British‐ and Italian‐Based Subsidiaries

A number of approaches to the diffusion of employment practices within American‐based multinational companies (MNCs) can be discerned. In this paper, two theoretical approaches are contrasted: a ‘country‐of‐origin’ approach in which the influence of the home country is mediated by national features of host‐country institutional environments; and a power resources or strategic choice approach that emphasizes the autonomy of local actors within MNCs and their capacity to shape the diffusion of employment practices. Using a case study comparison of three Italian and two British‐based subsidiaries owned by an American MNC, the paper examines factors and patterns of diffusion of employment practices from the parent company to the local subsidiaries. The argument is put forward that company‐specific features enhance the strategic power of the subsidiary firm within the wider corporation, thus complementing institutional host‐country characteristics in shaping the diffusion of employment practices abroad. Hence, organizational as well as institutional effects contribute to creating the space that the various actors across host countries possess for protecting their interests and for exercising power on the terms and conditions of the diffusion.     

Are Minimum Wage Effects Greater in Low‐Wage Areas?

Empirical work on the minimum wage typically estimates effects averaged across high‐ and low‐wage areas. Low‐wage labor markets could potentially be less able to absorb minimum wage increases, in turn leading to more negative employment effects. In this article, we examine minimum wage effects in low‐wage counties, where relative minimum wage ratios reach as high as 0.82, well beyond the state‐based ratios in extant studies. Using data from the American Community Survey, the Quarterly Workforce Indicators, and the Quarterly Census on Employment and Wages, we implement event study and difference‐in‐differences methods, estimating average causal effects for all events in our sample and separately for areas with lower and higher impacts. We find positive wage effects, especially in high‐impact counties, but do not detect adverse effects on employment, weekly hours, or annual weeks worked. We do not find negative employment effects among women, Blacks, and/or Hispanics. In high‐impact counties, we find substantial declines in household and child poverty. These results inform policy debates about providing exemptions to a $15 federal minimum wage in low‐wage areas.     

The effects of strategic and market complementarity on acquisition performance: evidence from the U.S. commercial banking industry, 1989–2001

Most traditional research on mergers and acquisitions tends to focus on the role of similarity in explaining acquisition performance. While scholars have recently begun to examine acquisition complementarity, there is still little evidence concerning how complementarity influences acquisition performance. Further, previous research has not drawn the connections between related contexts and the potential benefits from complementarity. In this article, we move the study of acquisition complementarity forward by investigating the effects of strategic and market complementarity on acquisition performance in the context of related horizontal acquisitions. We also propose that two key attributes of acquirers—strategic focus and out‐of‐market acquisition experience—will moderate this relationship. We investigate our research questions in the context of all 2,204 acquisitions made by publicly traded U.S. commercial banks during the 12‐year period from 1989 to 2001. Our findings are generally supportive, suggesting complementarity is an important antecedent of acquisition performance, and raising important issues on the nature of acquisition research in general. Copyright © 2009 John Wiley & Sons, Ltd.     

Competing with complementors: An empirical look at Amazon.com

Research Summary : Platform owners sometimes enter complementors' product spaces and compete against them. Using data from Amazon.com to study Amazon's entry pattern into third‐party sellers' product spaces, we find that Amazon is more likely to target successful product spaces. We also find that Amazon is less likely to enter product spaces that require greater seller efforts to grow, suggesting that complementors' platform‐specific investments influence platform owners' entry decisions. While Amazon's entry discourages affected third‐party sellers from subsequently pursuing growth on the platform, it increases product demand and reduces shipping costs for consumers. We consider the implications of these findings for complementors in platform‐based markets. Managerial Summary : Platform owners can exert considerable influence over their complementors' welfare. Many complementors with successful products are pushed out of markets because platform owners enter their product spaces and compete directly with them. To mitigate such risks, complementors could build their businesses by aggregating nonblockbuster products or focusing on products requiring significant platform‐specific investments to grow. They should also develop capabilities in new product discovery so that they could continually bring innovative products to their platforms.     

How anticipated employee mobility affects acquisition likelihood: Evidence from a natural experiment

This study draws on strategic factor market theory and argues that acquirers' decisions regarding whether to bid for a firm reflect their expectations about employee departure from the firm post‐acquisition, suggesting a negative relationship between the anticipated employee departure from a firm and the likelihood of the firm becoming an acquisition target. Using a natural experiment and a difference‐in‐differences approach, we find causal evidence that constraints on employee mobility raise the likelihood of a firm becoming an acquisition target. The causal effect is stronger when a firm employs more knowledge workers in its workforce and when it faces greater in‐state competition; by contrast, the effect is weaker when a firm is protected by a stronger intellectual property regime that mitigates the consequences of employee mobility. Copyright © 2014 John Wiley & Sons, Ltd.     

The Geography of Real Property Information and Investment: Firm Location,Asset Location and Institutional Ownership

Using a sample of Real Estate Investment Trusts (REITs), we show that institutional investors exploit location‐based information asymmetries by overweighting firms headquartered locally and those with greater economic interests in the investor's home metropolitan statistical area (MSA). This asset allocation strategy is associated with superior portfolio performance. In a difference‐in‐difference‐in‐differences analysis of investor headquarters relocations, we find that investors tend to increase their ownership of REITs that have property holdings in the market to which the investor relocates. Our findings highlight the importance of understanding the relation between information advantages and the geography of firm's operations, as well as the implications on ownership patterns and portfolio construction.     

Affiliation bias in the online market for rental accommodation

We find evidence of taste‐based discrimination against rival affiliations in the online market for rental accommodation. Airbnb hosts in college towns increase their listing prices more than hotels on home football games against rival teams. By setting listing prices too high as a result of their affiliation bias against rival fans, hosts experience a 30% reduction in rental income. The overestimation of demand, the cost (inconvenience) of temporary relocation, and the likelihood of incurring damage cannot explain the inverse relation between listing price increases, and rental incomes that is limited to games against rival teams. Instead, greater financial constraints are associated with smaller listing price increases, and higher rental incomes on rival games, suggesting that taste‐based discrimination is a luxury.     

The decline of science in corporate R&D

Research summary: In this article, we document a shift away from science by large corporations between 1980 and 2006. We find that publications by company scientists have declined over time in a range of industries. We also find that the value attributable to scientific research has dropped, whereas the value attributable to technical knowledge (as measured by patents) has remained stable. These trends are unlikely to be driven principally by changes in publication practices. Furthermore, science continues to be useful as an input into innovation. Our evidence points to a reduction of the private benefits of internal research. Large firms still value the golden eggs of science (as reflected in patents), but seem to be increasingly unwilling to invest in the golden goose itself (the internal scientific capabilities). Managerial summary: There is a widespread belief among commentators that large American corporations are withdrawing from research. Large corporations may still collaborate with universities and acquire promising science‐based start‐ups, but their labs increasingly focus on developing existing knowledge and commercializing it, rather than creating new knowledge. In this article, we combine firm‐level financial information with a large and comprehensive data set on firm publications, patents and acquisitions to quantify the withdrawal from science by large American corporations between 1980 and 2006. This withdrawal is associated with a decline in the private value of research activities, even though scientific knowledge itself remains important for corporate invention. We discuss the managerial and policy implications of our findings.     

U.S. Multinational Activity Abroad and U.S. Jobs: Substitutes or Complements?

Critics of globalization claim that firms are being driven by the prospects of cheaper labor and lower labor standards to shift employment abroad. Yet the evidence, beyond anecdotes, is slim. This paper reports stylized facts on the activities of U.S. multinationals at home and abroad for the years 1977 to 1999. We focus on firms in manufacturing and services, two sectors that have received extensive media attention for supposedly exporting jobs. Using firm‐level data collected by the Bureau of Economic Analysis (BEA) in Washington, D.C., we report correlations between U.S. multinational employment at home and abroad. Preliminary evidence based on the operations of these multinationals suggests that the sign of the correlation depends on the crucial distinction between affiliates in high‐income and low‐income countries. For affiliates in high‐income countries there is a positive correlation between jobs at home and abroad, suggesting that foreign employment of U.S. multinationals is complementary to domestic employment. For firms that operate in developing countries, employment has been cut in the United States, and affiliate employment has increased. To account for firm size, substitution across firms and entry and exit, we aggregate our data to the industry level. This exercise reveals that the observed “complementarity” between U.S. and foreign jobs has been driven largely by a contraction across all manufacturing sectors. It also reveals that foreign employment in developing countries has substituted for U.S. employment in several highly visible industries, including computers, electronics, and transportation. The fact that there were U.S. jobs lost to foreign affiliates in key sectors, despite broad complementarity in hiring and firing decisions between U.S. parents and their affiliates, helps explain why economists view the impact of globalization on U.S. jobs as benign despite negative news coverage for declining industries.