Journal of Labor Economics Vol. 33 No. 3 2015

Matching Firms, Managers, and Incentives

Oriana Bandiera¹; Luigi Guiso²; Andrea Prat³; Raffaella Sadun

¹ London School of Economics and Political Science · ² Einaudi Institute for Economics and Finance · ³ Columbia University

Abstract

We combine unique administrative and survey data to study the match between firms and managers. The data include manager characteristics, firm characteristics, detailed measures of managerial practices, and outcomes for the firm and the manager. A parsimonious model of matching and incentives generates implications that we test with our data. We use the model to illustrate how risk aversion and talent determine how firms select and motivate managers. We show that empirical links between firm governance, incentives, and performance, which have so far been studied in isolation, can instead all be interpreted within our simple unified matching framework.

DOI

10.1086/679672

Volume

33

Issue

3

Pages

623-681

Language

en

Sources

openalex crossref

Cite

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