Globalization and the provision of incentives inside the firm: The effect of foreign competition

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Cuñat Martínez, Vicente; Guadalupe, Maria. Globalization and the provision of incentives inside the firm: The effect of foreign competition. 2009
http://hdl.handle.net/10230/4582
To cite or link this document: http://hdl.handle.net/10230/4582
dc.contributor.author Cuñat Martínez, Vicente
dc.contributor.author Guadalupe, Maria
dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
dc.date.issued 2009-01-01
dc.identifier.uri http://hdl.handle.net/10230/4582
dc.description.abstract This paper studies the effect of changes in foreign competition on the structure of compensation and incentives of U.S. executives. We measure foreign competition as import penetration and use tariffs and exchange rates as instrumental variables to estimate its causal effect on pay. We find that higher foreign competition leads to more incentive provision in a variety of ways. First, it increases the sensitivity of pay to performance. Second, it increases whithin-firm pay differentials between executive levels, with CEOs typically experiencing the largest wage increases, partly because they receive the steepest incentive contracts. Finally, higher foreign competition is also associated with a higher demand for talent. These results indicate that increased foreign competition can explain some of the recent trends in compensation structures.
dc.language.iso eng
dc.relation.ispartofseries Economics and Business Working Papers Series; 1134
dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.title Globalization and the provision of incentives inside the firm: The effect of foreign competition
dc.type info:eu-repo/semantics/workingPaper
dc.date.modified 2014-06-03T07:14:23Z
dc.subject.keyword Labour, Public, Development and Health Economics
dc.subject.keyword incentives
dc.subject.keyword performance-related-pay
dc.subject.keyword wage structure
dc.subject.keyword promotions
dc.subject.keyword demand for talent
dc.subject.keyword globalization
dc.subject.keyword product market competition
dc.rights.accessRights info:eu-repo/semantics/openAccess


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