How you pay matters: performance-related pay and learning by exporting
Empirical Economics, 2021, vol. 60, issue 5, No 13, 2455-2475
Abstract This paper argues that the extent of learning by exporting (LBE) depends on which pay system a new exporting firm pre-adopts. This is because performance-related pay enhances the absorptive capacity of new exporting firms by meeting the increased demand for labor quantity and quality. To empirically examine the argument, I use the Korean firm-level survey of business activities from 2006 to 2015, which provides information that identifies the export status, classifies pay-system types, and estimates total factor productivity. To control for self-selection into export markets, I use a combination of matching techniques and difference-in-differences. Empirical results reveal that the LBE exists instantaneously in the overall sample. Interestingly, new exporting firms pre-adopting a merit bonus are more likely to obtain significant and sizeable productivity gains from exporting than are ones without a merit bonus, regardless of whether a basic salary ties employee’s performance or not, i.e., merit pay or seniority-based pay. The results from various robustness checks support the main results.
Keywords: Learning by exporting; Merit bonus; Merit pay; Seniority-based pay (search for similar items in EconPapers)
JEL-codes: F14 M52 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s00181-020-01832-4 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:spr:empeco:v:60:y:2021:i:5:d:10.1007_s00181-020-01832-4
Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2
Access Statistics for this article
Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund
More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().