Incentive Pay and Performance: Insider Econometrics in a Multi-Unit Firm

Jan Svejnar and Hein Bogaard

No 9789, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We exploit organizational reforms in a foreign-owned bank in Central-East Europe to study the implementation of modern HRM policies in an emerging market context. We have branch-level data and use our knowledge of the process that led to the adoption of the reforms to implement two estimators that address endogeneity bias in a complementary fashion: an IV approach and Generalized Propensity Score estimation. Our results show that some of the reforms had a positive impact on productivity, but they also underscore the risks of quantity-based incentives where quality is important.

Keywords: Banking; Central and eastern europe; Endogeneity of hrm policies; Foreign ownership; Incentives; Insider econometrics (search for similar items in EconPapers)
JEL-codes: F23 G21 M52 (search for similar items in EconPapers)
Date: 2014-01
New Economics Papers: this item is included in nep-cse, nep-eff, nep-hrm, nep-lab and nep-tra
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Related works:
Journal Article: Incentive pay and performance: Insider econometrics in a multi-unit firm (2018)
Working Paper: Incentive Pay and Performance: Insider Econometrics in a Multi-Unit Firm (2013)
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