Is there Discretion in Wage Setting? A Test Using Takeover Legislation

Marianne Bertrand and Sendhil Mullainathan

Working Papers from Princeton, Woodrow Wilson School - Public and International Affairs

Abstract: In this paper, we use states' passage of anti-takeover legislation as a source of such independent variation. Passed in the 1980s, these laws serioulsy limited takeovers of firms incorporated in legislating states. Since many view hostile takeovers as an important disciplining device, these laws potentially raised managerial discretion in affected firms. If uncontrolled managers pay higher wages, we expect wages to rise following these laws.

Keywords: WAGES; MANAGEMENT; BUSINESS FINANCING (search for similar items in EconPapers)
JEL-codes: G30 J30 M12 (search for similar items in EconPapers)
Pages: 37 pages
Date: 1998
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Related works:
Journal Article: Is There a Discretion in Wage Setting? A Test Using Takeover Legislation (1999)
Working Paper: Is there Discretion in Wage Setting? A Test Using Takeover Legislation (1998)
Working Paper: Is There Discretion in Wage Setting? A Test Using Takeover Legislation (1998)
Working Paper: Is There Discretion in Wage Setting? A Test Using Takeover Legislation (1998)
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