| 29. |
The return on human capital: the case of UK non-executive directors that are also executive directors, (06/2011, PDF) |
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Charlie Weir (Aberdeen Business School), Alexander Muravyev (IZA-Bonn) and Oleksandr Talavera |
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This paper studies the relationship between directors’ human capital and the company’s performance. In particular, we focus on the effect of non-executive directors who are also executive in other firms (independent executives, IE). The analysis is based on a unique dataset of publicly traded firms in the UK which we obtain by matching Extel Financial and Corporate Register data. Our results suggest a positive relationship between the presence of IE on corporate board and company performance. The effect is stronger IEs come from well performing firms. Additionally, the similarity of industries plays a role. |
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| 28. |
Bilateral Delegation, Wage Bargaining and Managerial Incentives: Implications for Efficiency and Distribution, (06/2011, PDF) |
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Ishita Chatterjee (University of Western Australia) and Bibhas Saha |
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Abstract: We develop a model of bilateral delegation in wage and employment bargaining to study efficiency and distributional implications in monopoly and in Cournot duopoly. In both markets delegation causes underproduction, but has contrasting implications for bargaining pie and for its distribution. In monopoly the bargaining pie contracts. In duopoly the bargaining pie expands, sometimes even up to the collusive level suggesting that delegation is conducive to implicit collusion. Surprisingly, a party’s payoff can be inversely related to its bargaining power. The well-known duopoly result of overproduction occurs only in unilateral delegations and when the delegating party is sufficiently strong. |
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| 27. |
Equal opportunities in science? Evidence on gender pay gaps amongst scientists working in the UK, (04/2011, PDF) |
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Sara Connolly and Susan Long |
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Abstract: The groundbreaking MIT report (1999) was the first study to quantify the disadvantages faced by female scientists. This has been followed by studies of gender pay differentials amongst academics working in the humanities (US), economics (UK and US) and the sciences (US). This paper provides the first detailed study of gender pay differentials amongst scientists working in the UK.
Our data allows us to contrast the experiences of scientists working in Higher Education (academic scientists) with those working in Research Institutes (research scientists) We find that there is a gender pay differential of 22% (£6-7,000), most of which can be accounted for in terms of age, grade, subject, research esteem, workplace and domestic responsibilities, but a significant proportion remains unexplained (19% in academic and 30% in research science). Our results suggest that across grades, if female scientists were to receive the same returns as male scientists, the gender pay gap would narrow significantly and would close at the bottom end of the distribution.
Grade accounts for over 40% of gender gap in pay, so we also explore variation in salary within grade and find evidence that, based on characteristics alone, female professors might expect a pay premium but the differences in returns result in an estimated average pay penalty of £4,000. Finally, we consider what the gender pay gaps might be if the promotion process were gender neutral, in the sense of characteristics being equally rewarded, here we find that the unexplained pay gap might be as high as 40%. |
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| 26. |
Main bank power, switching costs, and firm performance. Evidence from Ukraine, (03/2011, PDF; forthcoming in Emerging Markets Finance and Trade) |
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Andreas Stephan (Jonkoping International Business School), Oleksandr Talavera and Andriy Tsapin (Ostroh Academy) |
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Abstract: We examine firms’ motivation to change their main bank and how this switch affects loans, interest payments and firm performance after switching. Applying treatment effect analysis on unique firm-bank matched Ukrainian data, we find that larger and highly leveraged companies are more likely to switch their main bank. Importantly, firms tend to switch to a new main bank which holds a higher share of equity in the firm and thereby has stronger power. The results also suggest that firms after switching obtain additional access to bank loans but have on average lower profits due to increased interest payments. |
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| 25. |
Group Contest with Internal Conflict and Power Inequality, (03/2011, PDF) |
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Jay Pil Choi (Michigan State), Subhasish M. Chowdhury and Jaesoo Kim (IUPUI) |
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Abstract: This article studies the interaction between simultaneous inter-group and intra-group conflicts. We introduce power inequality between group members and consider a constant elasticity of substitution group impact function. We explain how each group's internal conflict influences its chance of winning in the external conflict and show that a less conflictive group may expend more effort in collective action if the group impact function shows enough degrees of complementrarity. In addition, we demonstrate a possible non-monotonic change in the equilibrium payoff and rent dissipation with respect to the power inequality. |
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| 24. |
Top Guns May Not Fire: Best-Shot Group Contests with Group-Specific Public Good Prizes, (03/2011, PDF) |
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Subhasish M. Chowdhury, Dongryul Lee (Ulsan), and Roman M. Sheremeta (Chapman University) |
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Abstract: We analyze a group contest in which n groups compete to win a group-specific public good prize. Group sizes can be different and any individual player may value the prize differently within and across groups. Players expend costly efforts simultaneously and independently. Only the highest effort (the best-shot) within each group represents the group effort and the winning group is determined by a contest success function. We fully characterize the set of equilibria and show that in any equilibrium at most one player in each group exerts strictly positive effort. There always exists an equilibrium in which only the highest value player in each active group expends positive effort and the contest is reduced to an individual contest between individual players. However, there may also be equilibria in which the highest value players completely free ride on others by exerting no effort. We provide conditions under which this can be avoided and discuss contest design implications. |
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| 23. |
Can State Language Policies Distort Students' Demand for Higher Education?, (12/2010, PDF) |
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Alexander Muravyev (IZA-Bonn) and Oleksandr Talavera |
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Abstract: This paper takes advantage of a recent policy experiment in Ukraine's secondary education system to study the effect of stricter requirements for proficiency in the state language on linguistic minority students' demand for, as well as opportunities to pursue, further studies at the university level. The reform that we consider obligated all minority students, including those studying in public schools with a full cycle of education in minority languages, to take a standardized school exit test (which is also a university entry test) in Ukrainian, the state language, thus denying them previously granted access to translated tests. Using school-level data and employing the difference-in-difference estimator we find evidence that the reform resulted in a decline in the number of subjects taken by minority students at the school exit test. There was also a notable shift in the take-up of particular subjects, with fewer exams taken by minority students in more linguistically-demanding subjects such as History, Biology, and Geography, and more exams taken in foreign languages and Math. Overall, our results suggest some distortions in the accumulation of human capital by linguistic minority students induced by the language policy. |
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| 22. |
Endorse or Not to Endorse: Understanding the Determinants of Newspapers’ Likelihood of Making Political Recommendations, (12/2010, PDF) |
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Fernanda de Leon |
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Abstract: This paper investigates the determinants of newspapers’ provision for political endorsements. I empirically examine the role of newspapers’ political preferences and market competition on newspapers’ decision. Regression results suggest that market competition inhibits newspapers from making endorsements. Results from a simple model show that newspapers’ ideology determine their endorsements, turning partisan papers more likely to make political recommendations and more likely to endorse challengers than non-partisan newspapers. |
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| 21. |
The Tuesday Advantage of Candidates Endorsed by American Newspapers, (11/2010, PDF) |
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Fernanda de Leon |
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Abstract: This paper documents the electoral advantage of candidates who have a newspaper endorsement republished on Election Day in comparison to other endorsed candidates. I provide evidence that this advantage is not driven by a selection effect, suggesting that it is instead explained by readers deciding how to vote based on endorsements read on Election Day. I reject some other mechanisms that could explain the influence of this endorsement, but the advice provided on the day of the election. Moreover, candidates that have a different political orientation from their endorsing newspapers benefit more from this endorsement than other candidates. These results are based on a newly-compiled dataset matching county-level data of 826 endorsed candidates election results with newspaper and county characteristics. |
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Papers 01-20 |
