The impact of group incentives on performance of small firms: Hausman-Taylor estimates
This paper investigates the impact of group incentives on firms' performance. It shows that group incentive raises firms' performance. This result empirically validates the implication of the theoretical literature that performance-related pay can potentially improve firms' performance, in the context of a developing country, and indicates the importance of group incentives in small firms. It also shows that partnership firms perform better than private limited companies and labour unions have a negative impact on firms' performance. It employs the Hausman-Taylor random effects estimator in order to isolate the effects of time-invariant covariates and also to tackle potential endogeneity problem. Copyright © 2010 John Wiley & Sons, Ltd.
Volume (Year): 31 (2010)
Issue (Month): 6 ()
|Contact details of provider:|| Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Steven Shavell, 1979. "Risk Sharing and Incentives in the Principal and Agent Relationship," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 55-73, Spring.
- Edward P. Lazear, 1999. "Output-based Pay: Incentives or Sorting?," NBER Working Papers 7419, National Bureau of Economic Research, Inc.
- Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
- Peter Egger & Michael Pfaffermayr, 2004.
"Distance, trade and FDI: a Hausman-Taylor SUR approach,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 19(2), pages 227-246.
- Peter Egger & Michael Pfaffermayr, 2001. "Distance, Trade and FDI: A Hausman-Taylor SUR Approach," WIFO Working Papers 164, WIFO.
- Kraft, Kornelius, 1991. "The Incentive Effects of Dismissals, Efficiency Wages, Piece-Rates and Profit-Sharing," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 451-59, August.
- Bhattacherjee, Debashish, 2003.
"The Effects of Group Incentives in an Indian Firm - Evidence from Payroll Data,"
03-14, University of Aarhus, Aarhus School of Business, Department of Economics.
- Debashish Bhattacherjee, 2005. "The Effects of Group Incentives in an Indian Firm: Evidence from Payroll Data," LABOUR, CEIS, vol. 19(1), pages 147-173, 03.
- Hausman, Jerry A. & Taylor, William E., 1981.
"Panel data and unobservable individual effects,"
Journal of Econometrics,
Elsevier, vol. 16(1), pages 155-155, May.
- repec:lan:wpaper:3697 is not listed on IDEAS
- (*), Nigel Rice & Paul Contoyannis, 2001. "The impact of health on wages: Evidence from the British Household Panel Survey," Empirical Economics, Springer, vol. 26(4), pages 599-622.
- B Buraimo & D Forrest & R Simmons, 2006.
"Robust estimates of the impact of broadcasting on match attendance in football,"
574575, Lancaster University Management School, Economics Department.
- Babatunde Buraimo & David Forrest & Robert Simmons, 2006. "Robust Estimates of the Impacts of Broadcasting on Match Attendance in Football," IASE Conference Papers 0637, International Association of Sports Economists.
- Baltagi, Badi H & Khanti-Akom, Sophon, 1990. "On Efficient Estimation with Panel Data: An Empirical Comparison of Instrumental Variables Estimators," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 5(4), pages 401-06, Oct.-Dec..
- Edward P. Lazear, 2000. "The Power of Incentives," American Economic Review, American Economic Association, vol. 90(2), pages 410-414, May.
- Shleifer, Andrei & Vishny, Robert W., 1986.
"Large Shareholders and Corporate Control,"
3606237, Harvard University Department of Economics.
- Barton H. Hamilton & Jack A. Nickerson & Hideo Owan, 2003. "Team Incentives and Worker Heterogeneity: An Empirical Analysis of the Impact of Teams on Productivity and Participation," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 465-497, June.
- FitzRoy, Felix R & Kraft, Kornelius, 1986. "Profitability and Profit-Sharing," Journal of Industrial Economics, Wiley Blackwell, vol. 35(2), pages 113-30, December.
- Knez, Marc & Simester, Duncan, 2001. "Firm-Wide Incentives and Mutual Monitoring at Continental Airlines," Journal of Labor Economics, University of Chicago Press, vol. 19(4), pages 743-72, October.
- repec:lan:wpaper:3982 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:31:y:2010:i:6:p:403-414. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.