Managerial turnover and worker turnover
José Alfaro () and
DEE - Working Papers. Business Economics. WB from Universidad Carlos III de Madrid. Departamento de EconomÃa de la Empresa
We study the influence of the manager's degree of consolidation within the firm over the firm's labor policy. We argue that non-consolidated (recently-appointed) managers are more worried about short-term results than consolidated managers are. This feature leads the former to bias the labor contracting favoring short-term contracts. This has two main consequences. First, a higher variation in the number of workers hired in each period. And second, a lower increase in unitary labor costs. To contrast these results, we use a database of 1.054 Spanish companies during the period (1994-98), and analyze their managerial turnover as well as their corresponding variation in the number of workers and in unitary labor costs. The theoretical results are confirmed, especially for highly-productive R and D-intensive firms.
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Persistent link: https://EconPapers.repec.org/RePEc:cte:wbrepe:wb011304
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