a decomposition of training probabilities the determinants of workers training probabilities are analysed a distinction is made between the unconditional probability that a worker is employed by a firm that provides any training opportunities at all and the conditional probability that the worker receives training given that s he works for a firm that provides training for this analysis a censored version of the bivariate probit model is applied the results indicate that establishment size industry dummies type of schooling age and experience affect only the unconditional probability whereas the type of labour contract working hours and job level affect only the conditional probability years of formal schooling affect both probabilities more highly educated workers are both more likely to work for training providing firms and given that they work for such a firm to be selected for training programmes

attitudes toward risk and the risk return paradox prospect theory explanations this study attempted to explain bowman s risk return paradox in terms of recent research in behavioral decision theory and prospect theory the research emphasized the role of reference or target

the determinants of occupational success in britain this paper is concerned with measuring the true impact of certain human capital variables on an individual s occupational position the particular variables which are analysed are training qualifications and spells of sickness and unemployment the longitudinal nature of the data enables us to control for all relevant individual attributes which remain fixed over the period of the sample this is vitally important because these attributes are strongly correlated with the variables of interest and would seriously corrupt estimates derived from a single cross section a method of generating consistent estimates as n oo t fixed for a dynamic model with fixed effects is also illustrated

management ownership and market valuation an empirical analysis we investigate the relationship between management ownership and market valuation of the firm as measured by tobin s q in a 1980 cross section of 371 fortune 500 firms we find evidence of a significant nonmonotonic relationship tobin s q first increases then declines and finally rises slightly as ownership by the board of directors rises for older firms there is evidence that q is lower when the firm is run by a member of the founding family than when it is run by an officer unrelated to the founder

the wage effects of high performance work organization in manufacturing an unresolved question about now widespread innovative work systems such as teams and quality programs is whether they influence wage determination this study examines that possible association in manufacturing the author uses data from the 1997 national establishment survey that allow examination of how new work systems affected not only employees who were directly involved in them but other workers as well the key finding is that for core blue collar manufacturing employees higher wages were associated with high performance work organization hpwo systems while higher skill levels and computer based technologies were associated with higher wages the key mechanism appears to have been productivity gains independent of skill and technology that were shared via various across the board wage payment systems hpwo systems appear to have increased managers wages as well although through different channels the author finds no evidence that hpwo related wage gains led to greater wage inequality amon

agency relationships in family firms theory and evidence does owner management necessarily eliminate the agency costs of ownership drawing on agency literature and on the economic theory of the household we argue that private ownership and owner management expose privately held owner managed firms to agency threats ignored by jensen s and meckling s 1976 agency model private ownership and owner management not only reduce the effectiveness of external control mechanisms they also expose firms to a self control problem created by incentives that cause owners to take actions which harm themselves as well as those around them jensen 1994 p 43 thus shareholders have incentive to invest resources in curbing both managerialand owner opportunism we extend this thesis to the domain of the family firm after developing hypotheses which describe how family dynamics and specifically altruism exacerbate agency problems experienced by these privately held owner managed firms we use data obtained from a large scale survey of family businesses to field test our hypotheses and find evidence which suggests support for our proposed theory finally we discuss the implications of our theory for research on family and other types of privately held owner managed firms

variations in r d investments of family and nonfamily firms behavioral agency and myopic loss aversion perspectives the behavioral agency model suggests that to preserve socioemotional wealth loss averse family firms usually invest less in r d than nonfamily firms however behavioral agency model predictions a

cooperation productivity and profit sharing firm specific assets generate an ex post bargaining problem over surplus division and rational workers may collude to obtain a surplus share in nonpecuniary form through restriction of effort conversely profit sharing should motivate cooperation to increase productivity when work organization facilitates interaction and horizontal monitoring since productive effort yields positive externalities to workers under contractual surplus sharing in simultaneous tobit estimates we find a strong influence of profit sharing on factor productivity in a sample of medium sized metalworking capitalist firms in west germany proxies for human capital and organizational factors were included

the fit between ceo compensation design and firm risk we examined the effects of unsystematic and systematic firm risk on ceo compensation risk bearing and total pay both the proportion of variable pay in ceo pay packages and their magnitude are curvilinearly related to unsystematic firm risk that is they are highest under conditions of moderate firm specific risk our results are consistent with agency theory predictions that both performance contingent pay and the greater earnings potential associated with that form of pay are highest when an agent has greater control over performance outcomes

competition and cooperation in corporate governance the effects of labor institutions on blockholder effectiveness in 23 european countries we provide an analysis of the costs and benefits of blockholding in europe where it is a dominant but certainly not universal corporate governance strategy for shareholders of publicly listed firms we find that the effectiveness of blockholding is conditioned by the specific labor institutions that distinguish european countries from the rest of the world and that these institutional effects involve both competition and cooperation between blockholders and collective labor interests we also find that relational blockholders are better able to cope with or benefit from these institutional effects than arm s length blockholders empirically we use advanced meta analytic methods on a total sample of 748 569 firm year observations derived from 162 studies covering 23 european countries

labor market mobility and cash compensation the moderating effects of race and gender building upon the gender based study conducted by brett and stroh 1997 we examined the moderating effects of gender and race on the relationship between changing employers and compensation attai

employment relations in dual labor markets it s nice work if you can get it jobs in big firms command higher wages i examine four theories that could explain this relation first large firms incur higher fixed employment costs including more specific training second monitoring costs are greater in big firms and can be spread by hiring more productive workers third large firms may choose to pay efficiency wages to deter shirking finally large employers organize production around teams and pay higher wages to get workers who comply with the discipline of team production the dispersion of wages and working conditions in the u s labor market reflect the heterogeneity of jobs employment relations and individuals

when competitive advantage doesn t lead to performance the resource based view and stakeholder bargaining power what if rent from a competitive advantage is appropriated so it cannot be observed in performance measures the resourcebased view was not formulated to examine who will get the rent yet this essay argues that the factors leading to a resource based advantage also predict who will appropriate rent knowledge based assets are promising because firm specificity social complexity and causal ambiguity make them hard to imit ate however the roles of internal stakeholders may grant them a great deal of bargaining power especially relative to investors this essay integrates the resource based view with the bargaining power literature by defining the firm as a nexus of contracts this new lens can help to explain when rent will be generated and simultaneously who will appropriate it in doing so it provides a more robust theory of firm performance than the resource based view alone it is also suggested that this lens might be useful for examining other theories of firm performance

employer size wage effects evidence from matched employer employee survey data in the uk this paper employs a random sample of matched employer employee data from the uk to test seven possible explanations for the positive relationship between employer size and pay individual wage equations show a large employer size wage premium we then control for a range of establishment level variables based on seven hypotheses typically advanced to explain this premium each establishment level factor reduces the wage premium but a sizeable premium nonetheless remains in adjudicating on these hypotheses we find a strong association between the internal labour market and the employer size wage premium this finding supports the theory that the employer size wage effect may be due to the higher costs of turnover or monitoring in larger firms however we find contrasting effects for public versus private sector establishments

the wage effects of training in portugal differences across skill groups genders sectors and training types this article investigates the determinants and wage effects of training in portugal in a first stage we show that there are considerable differences in training participation across groups of workers with elder and low educated individuals participating substantially less in a second stage we show that training has a positive and significant impact on wages the estimated wage return is about 30 for men and 38 for women discriminating between levels of education and working experience and the public and private sector reveals important differences across categories of workers we find that women low educated workers and workers with long working experience earn larger returns from training the average effect of training is similar in the private sector and the public sector however differences across experience groups are larger in the private sector while differences across education groups are larger in the public sector we use three alternative classifications of training activities and f

doing more with less innovation input and output in family firms family firms are often portrayed as an important yet conservative form of organization that is reluctant to invest in innovation however simultaneously evidence has shown that family firms are flourishing and in fact constitute many of the world s most innovative firms our study contributes to disentangling this puzzling effect we argue that family firms owing to the family s high level of control over the firm wealth concentration and importance of nonfinancial goals invest less in innovation but have an increased conversion rate of innovation input into output and ultimately a higher innovation output than nonfamily firms empirical evidence from a meta analysis based on 108 primary studies from 42 countries supports our hypotheses we further argue and empirically show that the observed effects are even stronger when the ceo of the family firm is a later generation family member however when the ceo of the family firm is the firm s founder innovation input is higher and contrary to our initial expectations innovation output is lower than that in other firms we further show that the family firm innovation input output relationships depend on country level factors namely the level of minority shareholder protection and the education level of the workforce in the country

a theory of career mobility this paper analyzes theoretically and empirically the role and significance of occupational mobility in the labor market focusing on individuals careers it provides additional dimensions to the analysis of investment in human capital wage differences across individuals and the relationships among promotions quits and interfirm occupational mobility it is shown that part of the returns to education is in the form of higher probabilities of occupational upgrading within or across firms given an origin occupation schooling increases the likelihood of occupational upgrading furthermore workers who are not promoted despite a high probability of promotion are more likely to quit

firm size and job quality a survey of the evidence from germany small firms provide and create a large proportion of jobs in germany are these jobs worse than jobs in larger firms the mosaic picture that emerges from a review of several recent empirical studies using german individual or firm level micro data shows that all in all wages are lower non wage incomes fringes are lower job security is lower work organisation is less rigid institutionalized possibilities for workers participation in decision making are weaker and opportunities for skill enhancement are worse in small firms compared to large firms the weight of evidence therefore indicates that on average small firms offer worse jobs than large firms it is argued that there is no need for policy measures targeted to improve job quality in small firms because higher incomes in large firms can in part be seen as compensating differentials for more rigid work organisation and can follow from wage policies to reduce shirking and turnover that is more costly in large than in small firms furthermore a lower level of remuneration less protection against dismissals a lower level of workers participation and less opportunities for further training all contribute to lower costs in small firms that might be needed to compensate for size related cost disadvantages compared to large firms economic policy should concentrate on keeping barriers to entrepreneurs entry to markets low to foster new firm formation and creative destruction

are family firms good employers family firms employ about 60 percent of the global workforce while it is widely assumed that they are good employers data about their conduct is mixed in this study we extend stewardship and agency theories to test competing propositions about the impact of family on employment practices using data from 14 961 private belgian firms over a 19 year period higher investments lower dividend payout and higher risk tolerance indicate that family firms are better financial stewards of their companies than nonfamily firms however family firms are worse organizational stewards than nonfamily firms they offer lower compensation invest less in employee training and exhibit higher voluntary turnover and lower labor productivity further and contrary to earlier research we find that financial practices in private family firms do not change over time and that the deleterious influence of family on employment practices rises with both firm age and with heightened family involvement together our findings suggest that a more nuanced understanding of stewardship and agency theory is needed to understand the impact of family on the governance of private firms

working in family firms paid less but more secure evidence from french matched employer employee data the authors study compensation packages in family owned and nonfamily owned firms using french matched employer employee data they first show that family firms pay on average lower wages part of this wage gap is attributable to low wage workers sorting into family firms and high wage workers sorting into nonfamily firms however they also find evidence that company wage policies differ according to ownership status so that the same worker is paid differently under family and nonfamily firm ownership in addition family firms are characterized by lower job insecurity as measured by lower dismissal rates family firms also appear to rely less on dismissals and more on hiring reductions than do nonfamily firms when they downsize the authors show that compensating wage differentials account for a substantial part of the inverse relationship between the family nonfamily gaps in wages and job security

come aboard exploring the effects of directorships in the executive labor market in this study we examine the following question what do executives gain from serving on boards we propose that board service benefits non ceo level executives in the executive labor market by acting as a certification mechanism and by providing access to unique knowledge skills and connections we argue that non ceo executives who gain directorships will be more likely to be promoted to ceo both inside and outside their home firm will be more likely to be promoted internally and will receive higher pay from their home firms to test our ideas we employ propensity score matching to construct a longitudinal sample of 2 104 top executives of large publicly traded companies in the united states over the period 1996 to 2012 the results provide consistent support for our theory

the ownership structure contingency in the sequential international entry mode decision process family owners and institutional investors in family dominant versus family influenced firms extending our understanding of family firms and international business research with respect to entry mode decisions this study explains how entry mode choice is the product of a sequential decision making process with an important ownership structure contingency we propose that firms with a dominant family owner family dominant firms prefer low equity ownership as their entry mode for the purpose of preserving their socioemotional wealth their preference is persistent even when the institutional investors are the dominant shareholders in the firm family influenced firms this nuanced examination of the role family values play in the entry mode decision extends our understanding of how family firms enter international markets

bank failures as poisson variates abstract the elasticity of bank failures with respect to a set of explanatory variables is estimated using a maximum likelihood poisson estimator the resulting estimates are compared with their ols counterparts

managerial ownership of voting rights abstract managers of firms with dual classes of common stock can choose different quantities of votes for a given cash flow interest by choosing different quantities of the two securities we study managerial stock holdings in 45 dual class firms and find that vote ownership per se is an important motivation for these holdings in that corporate officers and their families hold a median 56 9 of the votes and 24 0 of the common stock cash flows we also find significant family involvement in many sample firms and document four case studies in which explicit acquisition premiums were paid for superior voting shares

occupational mobility in england this paper examines evidence on occupational movement in england using data from the new earnings panel dataset although most occupations are characterized by a high degree of immobility there is some evidence of an increase in occupational mobility between 1990 and 1994 using a compound poisson modelling approach for count data combined with a gravity model the paper investigates the incentives and constraints upon aggregate movement between occupations over two time periods 1985 90 and 1990 94 results suggest that the responsiveness of movement into a wide range of occupations as a result of a rise in wages is relatively elastic for males and relatively inelastic for females the paper also demonstrates that significant barriers to movement exist which either prevent a response to market signals or inhibit the extent of that response

local authority fiscal stance and the pattern of residential migration in the north west of england the degree of fiscal mobility present in household migration flows between local authority areas in northwestern england is assessed following an introduction the paper is divided into three sections the first reviews the methodologies of previous attempts to assess the extent of fiscally induced migration noting the dominance of american studies and outlines a choice theoretic structure within which it is possible to model human migration patterns section iii considers the problems inherent in modelling migration flows and section iv presents results for a compound poisson analysis of migration between local authority areas within the four counties of the north west region of england as well as an assessment of the prevalence of fiscal mobility excerpt

research expenditures and the discovery of new drugs this paper examines technical change in the ethical pharmaceutical industry a poisson specification is used to estimate a productivity relationship between research expenditures and drug discoveries thus taking into account the integer nature of the data the result s of estimations using panel data indicate that there is a positive c orrelation between a firm s research and development intensity and it s probability of discovering a new drug firm size however does not significantly affect the marginal productivity of research expenditu res finally the estimates show that an increase in regulatory strin gency decreases the expected number of new drug discoveries copyright 1987 by blackwell publishing ltd

earnings and caste an evaluation of caste wage differentials in the nepalese labour market abstractthis paper examines the sources of wage differentials among castes in nepal a country which had until 1963 an age old caste based social division of labour we use an extended oaxaca decomposition model with occupation and firm size augmenting the conventionally used measures of human capital endowments our results indicate that caste wage differentials in nepal are large and that human capital endowments and lack of access to better paying occupations and larger firms have a significant impact furthermore we find mixed evidence that the government policy of affirmative action has narrowed down the caste wage differential

efficiency and internal organization works councils in west german firms efficiency voice theory has not explained why highly competent managers cannot maintain effective communication without formal or mandatory institutions of l abor s voice powerful west german works councils are negatively rela ted to productivity in the sample suggesting that the best managers can do better without councils however excessive pressure on worker s should encourage both unionization and councils to gain compensatin g differentials and the simultaneous wls tobit estimates also suppor t this effect general productivity benefits from formal voice organi zation are strongly rejected but evaluating welfare efficiency and causality directly requires data on job satisfaction and managerial ability copyright 1987 by the review of economic studies limited

do newly founded firms pay lower wages first evidence from germany using a linked employer employee data set for germany this paper analyses wage setting in a cohort of newly founded and other establishments from 1997 to 2001 while theory provides alternative explanations for higher or lower wages in newly founded firms we show empirically that start ups tend to pay lower wages ceteris paribus on average wages in newly founded establishments are 8 lower than in similar incumbent firms this negative wage differential is substantially smaller in eastern than in western germany the wage differ ential is shown to decline over time as the newly founded firms become more mature

stewardship or agency a social embeddedness reconciliation of conduct and performance in public family businesses two contradictory perspectives of family business conduct and performance are prominent in the literature the stewardship perspective argues that family business owners and managers will act as farsighted stewards of their companies investing generously in the business to enhance value for all stakeholders by contrast the agency and behavioral agency perspectives maintain that major family owners in catering to family self interest will underinvest in the firm avoid risk and extract resources this paper argues that both these views have application but under different circumstances determined in part by the degree to which the firm and its executive actors are embedded within the family and thus identify with its interests stewardship behavior will be less common and agency behavior will be more common the greater the number of family directors officers generations and votes and the more executives are susceptible to family influence these findings are supported among fortune 1000 firms as well as among the subsample of those firms that are family businesses

corporate performance and managerial remuneration an empirical analysis abstract economic theories of efficient compensation predict a positive relationship between executive pay and corporate performance and yet efforts to document this relationship have been largely unsuccessful in this paper we argue that previous cross sectional studies have omitted important variables which seriously bias their results using data that focus on individual executives over time we find that executive compensation is strongly positively related to corporate performance as measured by shareholder return and growth in firm sales the results are robust to the stock market performance measure utilized

an analysis of the stock price reaction to sudden executive deaths implications for the managerial labor market abstract certain characteristics of managerial employment arrangements and of the managerial labor market make shareholder wealth dependent on an executive s continued employment these wealth effects are investigated by examining the common stock price reaction to unexpected deaths of senior corporate executives abnormal stock price changes are documented for a sample of fifty three events these abnormal stock price changes are associated with the executive s status as a corporate founder and with measures of the executive s talents and decision making responsibility and of the transaction costs associated with renegotiating or terminating the employment agreement

the pattern of changes in the long term development of establishment size hypotheses and analyses dealing with the expansion of small businesses are usually carried out over relatively short periods of time the patterns drawn from these examinations e g on the question of specific differences in the growth of size are usually influenced by configurations of the overall economy and limit the realization of regular processes to the phases they are based upon a second disadvantage lies in most cases in the fact that data sources are used for the empirical analyses that do not cover the economic system as a whole nor for all sizes of establishments this study attempts to present the development of the sizes of establishments in germany over a period of more than one hundred years 1882 to 1987 and thus avoids the narrow perspective of previous examinations it becomes evident that this development does not take a continuous course instead it follows a wave pattern since this discontinuous development pattern is common to almost all sectors it appears to be a general phenomenon this study reveals that the small establishments with more than five employees contrary to most theoretical assumptions are of utmost importance even when considered over a long period of time the growth of small establishments in recent years observable in all sectors may not be a unique phenomenon however in view of an overall growth of employment and the simultaneous shrinking of large establishments it occurs under a new constellation

the earnings function under test abstract earnings functions of the well known mincer type based on data from five samples of german male full time workers are estimated and tested the hypotheses of normally distributed homoscedastic errors and a correctly specified functional form are nearly always rejected

the role of off the job vs on the job training for the mobility of women workers the transition from school to work is typically a period in which many young workers experience a wide range of different jobs and experience some of their most rapid wage growth over their working life robert hall 1982 has estimated that the first 10 years of an individual s working career will include approximately two thirds of all lifetime job changes robert topel and michael ward 1988 found that over half of young male new entrants held six or more jobs over the first 10 years of their work experience only one young male worker in twenty held a single job for 10 years in their sample all of this suggests that young workers early years in the labor market involve several employment transitions the purpose of this paper is to examine for young workers in their first years of work the determinants of leaving an employer in particular this paper focuses on the role of different types of training on the probability of leaving an employer in previous work 1990 i have examined the impact of private sector training on the determination of wages and wage growth of young workers and reached the following conclusions first formal company provided onthe job training on jt appears to be highly firm specific in the united states and therefore is not portable from employer to employer company provided training raises wages in the current job but has no effect on the wages earned in subsequent employment second formal off the job training off jt received from for profit proprietary institutions has little effect on the wages earned on the current job but it does raise the expected wage in subsequent employment finally there are important differences by race gender and education level in the probability of receiving different types of formal training and in the impact this training has on wages and wage growth these findings have several implications for the impact of training on mobility one implication is that if company provided training is primarily firm specific then the probability of leaving an employer should decline if a young worker has experienced some on jt an additional implication is that if a worker participates in an off jt program it appears that the worker should be more likely to leave the current employer in this case off jt allows a young worker to change career paths and find a better match using data from the national longitudinal survey youth nlsy cohort this paper examines in detail the factors that influence the probability of new entrants leaving their first job including the differential effects of company provided training apprenticeships and training from for profit proprietary institutions

the structure of ownership and the theory of the firm the separation of ownership from control produces a condition where the interests of owner and of ultimate manager may and often do diverge and where many of the checks which formerly operated to limit the use of power disappear in creating these new relationships the quasi public corporation may fairly be said to work a revolution it has divided ownership into nominal ownership and the power formerly joined to it thereby the corporation has changed the nature of profit seeking enterprise 1

opportunity preference and constraint an approach to the analysis of metropolitan migration the paper aims to consider how the fragmentation in the literature on migration may be overcome and to develop an integrated model of migration which can be applied to all types of population flow in the london metropolitan region the need for such an approach follows from the complexity of flows observed at the 112 zone level of disaggregation as well as the unresolved problems of the literature despite this catholicity of aim the theoretical basis of the model is essentially economic drawing on aspects of human capital and search and spatial choice theories with an emphasis on the interaction between three concepts opportunities preference and constraints in determining observed levels of migration

the determination of contract wages in west germany the determination of contract wages in west germany is studied within a bargaining framework taking into account some institutional features of the bargaining system as well as the influence of economic forecasts and wage concepts cointegration regressions suggest that in the long run nominal contract wages are linked to prices productivity each with a unit elasticity and unemployment in addition to these factors expectational errors concerning the inflation rate during the contract period and changes in the tax wedge affect real wage growth in the short run but these effects seem to be temporary rather than permanent

new firms and labor market entrants is there a wage penalty for employment in new firms in this paper we explore the role of new firms as an entry point to the labor market because the vast majority of new firms are short lived it is a risky decision to accept employment in a new venture it can be argued that individuals with little or no labor market experience are more willing to accept the high risks associated with employment in new firms hence new firms may work as an entry point to the labor market nevertheless some research concludes that one disadvantage of employment in a new firm is that new firms pay less shane in small bus econ 33 141 149 2009 however this empirical conclusion is primarily based on literature on the wage penalty of small firms in this paper we study whether the wage penalty of employment in a new firm persists if we focus solely on labor market entrants in the empirical analysis we employ an employer employee matched dataset that covers the swedish population during the period from 1998 to 2008 we use the propensity score matching method to study the wage differences between labor market entrants employed in new and incumbent firms we find an average wage penalty of 2 9 for labor market entrants employed in new firms over the studied period

testing a causal model of corporate risk taking and performance the determinants of organizational risk taking and its impact on economic performance are critical issues in strategic management using a model that included risk performance performance expecta