Promotion Determinants in Corporate Hierarchies: An Examination of Fast Tracks and Functional Area
AbstractThis article estimates a dynamic reduced-form model of intra-firm promotions using an employer-employee panel of over 300 of the largest corporations in the U.S. in the period from 1981 to 1988. The estimation conditions on unobserved individual heterogeneity and allows for both an endogenous initial condition and sample attrition linked to individual heterogeneity in demonstrating the relative importance of variables that influence promotion. The role of the executive's functional area in promotion is considered along with the existence and source of promotion fast tracks. We find that while the principal determinant of promotions is unobserved individual heterogeneity, functional area has a high explanatory power, resulting in promotion probabilities that differ by functional area for executives at the same reporting level and firm. No evidence is found that an executive's recent speed of advancement in pay grade has a causal impact on in- sample promotions after conditioning on the executive's career speed of advancement. For high-level executives, fast tracks appear to result from heterogeneity in persistent individual characteristics, not from an inherent benefit in recent advancement itself.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6948.
Length: 35 pages
Date of creation: Oct 2012
Date of revision:
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Other versions of this item:
- Christian Belzil & Michael Bognanno & Francois Poinas, 2012. "Promotion Determinants in Corporate Hierarchies: An Examination of Fast Tracks and Functional Area," DETU Working Papers 1206, Department of Economics, Temple University.
- Belzil, Christian & Bognanno, Michael & Poinas, François, 2012. "Promotion Determinants in Corporate Hierarchies: An Examination of Fast Tracks and Functional Area," TSE Working Papers 12-348, Toulouse School of Economics (TSE).
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- M5 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics
- M51 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Firm Employment Decisions; Promotions
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