How does product market competition shape incentive contracts?
Vicente Cuñat () and
Maria Guadalupe ()
LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library
This paper studies the effect of product market competition on the explicit compensation packages that firms offer to their CEOs, executives and workers. We use a large sample of both traded and non-traded UK firms and exploit a quasi-natural experiment associated to an increase in competition. The sudden appreciation of the pound in 1996 implied different changes in competition for sectors with different degrees of openness. Our difference in differences estimates show that a higher level of product market competition increases the performance pay sensitivity of compensation schemes, in particular for executives.
Keywords: Performance-related pay; Product market competition (search for similar items in EconPapers)
JEL-codes: J32 J33 J41 J49 M12 (search for similar items in EconPapers)
Pages: 37 pages
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (64) Track citations by RSS feed
Downloads: (external link)
http://eprints.lse.ac.uk/19894/ Open access version. (application/pdf)
Journal Article: How Does Product Market Competition Shape Incentive Contracts? (2005)
Working Paper: How Does Product Market Competition Shape Incentive Contracts? (2005)
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:ehl:lserod:19894
Access Statistics for this paper
More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().