Entrepreneurs’ education and different variable pay schemes in Italian firms

Mirella Damiani and Andrea Ricci

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, we investigate the influence of the education of entrepreneurs, which we hypothesise to be a signal of talent, on the adoption of variable pay (VP) schemes in the Italian economy. We estimate to what extent differences in the diffusion of VP between Italian firms reflect differences in the quality of entrepreneurs. Our estimates, which we obtained by taking both endogeneity and unobserved heterogeneity into account, validate hypotheses about the direct positive effects of entrepreneurs’ education on the adoption of VP schemes. Furthermore, we ascertain the role of entrepreneurs’ education by examining its influence on the choice between different types of VP bonuses at the individual, group, or establishment levels. Our results suggest that highly educated entrepreneurs are more likely to use individual or collective forms of VP schemes at the establishment level rather than team VP incentives.

Keywords: Variable pay; education (search for similar items in EconPapers)
JEL-codes: J33 J50 (search for similar items in EconPapers)
Date: 2013-04-13
New Economics Papers: this item is included in nep-edu, nep-ent, nep-hrm, nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:46163

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