The Effect of Adversity on Process Innovations and Managerial Incentives

Benoit Dostie and Rajshri Jayaraman ()
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Rajshri Jayaraman: European School of Management and Technology (ESMT)

No 4261, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper asks whether adversity spurs the introduction of process innovations and increases the use of managerial incentives by firms. Using a large panel data set of workplaces in Canada, our identification strategy relies on exogenous variation in adversity arising from increased border security along the 49th parallel following 9/11. Our longitudinal difference-in-differences estimates indicate that firms responded to adversity by introducing new or improved processes, but did not change their use of managerial incentives. These results suggest that the threat of bankruptcy may provide impetus for improving efficiency.

Keywords: efficiency; managerial incentives; natural experiment; process innovation (search for similar items in EconPapers)
JEL-codes: J33 L20 M52 O31 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2009-06
New Economics Papers: this item is included in nep-bec, nep-cse and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published as 'Do Higher Costs Spur Process Innovations and Managerial Incentives? Evidence from a Natural Experiment' in: Journal of Economics and Management Strategy, 2013, 22 (3), 529–550

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https://docs.iza.org/dp4261.pdf (application/pdf)

Related works:
Working Paper: The Effect of Adversity on Process Innovations and Managerial Incentives (2009)
Working Paper: The effect of adversity on process innovations and managerial incentives (2009)
Working Paper: The Effect of Adversity on Process Innovations and Managerial Incentives (2009)
Working Paper: The Effect of Adversity on Process Innovations and Managerial Incentives (2009)
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