Executive Compensation and Tournament Theory: Empirical Tests on Danish Data

Tor Eriksson

Journal of Labor Economics, 1999, vol. 17, issue 2, 262-80

Abstract: This article adds to the empirical literature on tournament theory as a theory of executive compensation. The author tests several propositions of tournament models on a rich data set containing information about 2,600 executives in 210 Danish firms during a four-year period. He asks if pay differentials between job levels are consistent with relative compensation; if pay dispersion between levels is higher in noisy environments; if the dispersion is affected by the number of tournament participants; if average pay is lower in firms with more compressed pay structures; and if wider pay dispersion enhances firm performance. Most of the predictions gain support in the data. Copyright 1999 by University of Chicago Press.

Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (264)

Downloads: (external link)
http://dx.doi.org/10.1086/209920 full text (application/pdf)
Access to full text is restricted to subscribers. See http://www.journals.uchicago.edu/JOLE for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:jlabec:v:17:y:1999:i:2:p:262-80

Access Statistics for this article

More articles in Journal of Labor Economics from University of Chicago Press
Bibliographic data for series maintained by Journals Division (pubtech@press.uchicago.edu).