【经管院每周系列讲座第281期】Spillover Effects in Executive Compensation

2015-12-11

Title: Spillover Effects in Executive Compensation Speaker: Tat-kei Lai, Copenhagen Business School   Host: Shihe Fu, Professor, RIEM Time: 13:00 --14:00 , Dec. 15, Tuesday Venue:  Room 1211 Gezhi Hall, Liulin Campus Abstract: We estimate the spillover effects in the compensation of top U.S. executives by examining how much a manager’s compensation is associated with the abilities of other managers within the same firm. Our empirical results show that: (1) Conditional on various observable and unobservable firm and manager heterogeneities, a manager earns more when working with more capable peers and the magnitudes are nontrivial. (2) Taking spillover effects into account in the wage regression further strengthens the explanatory power of unobservable manager heterogeneity but reduces the role of firm observable characteristics and unobservable heterogeneity, especially firm size. (3) Own manager fixed effects are positively correlated with co-manager fixed-effects, i.e., there is positive assortative matching among managers. Overall, our results suggest that the executive labor market prices spillovers by rewarding managers who work with better peers.   The paper can be downloaded at https://www.dropbox.com/s/geuumun35c1a88u/BL2015.pdf   About the speaker: Tat-kei Lai is an Assistant Professor in the Department of Economics at Copenhagen Business School. He received his Ph.D. degree in economics from University of Toronto. His main research areas are Industrial Organization, Labor Economics, and Corporate Finance. His publications appear in Journal of Economics and Business, Journal of Comparative Economics, Canadian Journal of Economics, and Applied Economics Letters. His personal web site is https://laitatkei.wordpress.com.

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