Promotion Determinants in Corporate Hierarchies: An Examination of Fast Tracks and Functional Area
This 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 executiveâ€™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.
|Date of creation:||Nov 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.cla.temple.edu/economics/
More information through EDIRC
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.:
- Michael Waldman, 1984.
"Job Assignments, Signalling, and Efficiency,"
RAND Journal of Economics,
The RAND Corporation, vol. 15(2), pages 255-267, Summer.
- Bognanno, Michael L. & Melero Martín, Eduardo, 2012.
"Promotion Signals, Age and Education,"
IZA Discussion Papers
6431, Institute for the Study of Labor (IZA).
- Robert Gibbons & Michael Waldman, 1999. "A Theory Of Wage And Promotion Dynamics Inside Firms," The Quarterly Journal of Economics, MIT Press, vol. 114(4), pages 1321-1358, November.
- DeVaro, Jed & Waldman, Michael, 2006.
"The signaling role of promotions: Further theory and empirical evidence,"
1550, University Library of Munich, Germany.
- Jed DeVaro & Michael Waldman, 2012. "The Signaling Role of Promotions: Further Theory and Empirical Evidence," Journal of Labor Economics, University of Chicago Press, vol. 30(1), pages 91 - 147.
- Treble, John & van Gameren, Edwin & Bridges, Sarah & Barmby, Tim, 2001. "The internal economics of the firm: further evidence from personnel data," Labour Economics, Elsevier, vol. 8(5), pages 531-552, December.
- Jeffrey M. Wooldridge, 2005.
"Simple solutions to the initial conditions problem in dynamic, nonlinear panel data models with unobserved heterogeneity,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 20(1), pages 39-54.
- Jeffrey M Wooldridge, 2002. "Simple solutions to the initial conditions problem in dynamic, nonlinear panel data models with unobserved heterogeneity," CeMMAP working papers CWP18/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
- Seltzer, Andrew & Merrett, David T, 2000. "Personnel Policies at the Union Bank of Australia: Evidence from the 1888-1900 Entry Cohorts," Journal of Labor Economics, University of Chicago Press, vol. 18(4), pages 573-613, October.
When requesting a correction, please mention this item's handle: RePEc:tem:wpaper:1206. 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: (Dimitrios Diamantaras)
If references are entirely missing, you can add them using this form.