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Firm-specific human capital, organizational incentives, and agency costs: Evidence from retail banking

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This paper explores conflicting implications of firm-specific human capital (FSHC) for firm performance. Existing theory predicts a productivity effect that can be enhanced with strong incentives. We propose an offsetting agency effect: FSHC may facilitate more-sophisticated ?gaming? of incentives, to the detriment of firm performance. Using a unique dataset from a multiunit retail bank, we document both effects and estimate their net impact. Managers with superior FSHC are more productive in selling loans but are also more likely to manipulate loan terms to increase incentive payouts. We find that resulting profits are two percentage points lower for high-FSHC managers. Finally, profit losses increase more rapidly for high-FSHC managers, indicating adverse learning. Our results suggest that FSHC can create agency costs that outweigh its productive benefits. .Printed Journal, baca ditempat

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Ketersediaan

Call Number	Location	Available
SMJ3509	PSB lt.dasar - Pascasarjana	1

Penerbit	Wiley Periodicals.,
Edisi	-
Subjek	Firm Agency costs Organizational incentives Performance pay Adverse learning specific human capital
ISBN/ISSN	1432095
Klasifikasi	-
Deskripsi Fisik	-
Info Detail Spesifik	-
Other Version/Related	Tidak tersedia versi lain
Lampiran Berkas	Tidak Ada Data