Journal ArticleDOI
Firm‐specific human capital, organizational incentives, and agency costs: Evidence from retail banking
TLDR
In this article, the authors explored conflicting implications of firm-specific human capital (FSHC) for firm performance and found that managers with superior FSHC are more productive in selling loans but also more likely to manipulate loan terms to increase incentive payouts.Abstract:
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.read more
Citations
More filters
Journal ArticleDOI
Corporate social responsibility as an employee governance tool: Evidence from a quasi-experiment
Caroline Flammer,Jiao Luo +1 more
TL;DR: In this paper, the authors examined whether companies employ corporate social responsibility (CSR) to improve employee engagement and mitigate adverse behavior at the workplace (e.g., shirking, absenteeism).
Journal ArticleDOI
Signaling for more money: The roles of founders' human capital and investor prominence in resource acquisition across different stages of firm development
Eun-Jeong Ko,Alexander McKelvie +1 more
TL;DR: In this article, the authors examine the signals of founders' human capital (i.e., education, industry experience, and founding experience) and investor prominence and their influence on the amount of external funding received across two stages of venture funding and find that founders' founding experience and education have the greatest effects for acquiring first-round financing, but in later stages, only the signaling effect from education remains.
Journal ArticleDOI
The effects of corporate social responsibility on firm performance: A stakeholder approach
Borham Yoon,Yeasun Chung +1 more
TL;DR: In this paper, the authors compare the internal and external stakeholder effect of corporate social responsibility (CSR) on a restaurant firm's financial performance and find that external CSR enhances a firm's market value but is negatively related to operational profitability.
Journal ArticleDOI
Effect of ethical leadership and corporate social responsibility on firm performance: A systematic review
TL;DR: In this article, a systematic review on the concepts of ethical leadership and CSR and their impact on firm performance is conducted, where 114 papers published over a period of 58 years were selected and analyzed according to descriptive and content perspectives to propose a conceptual framework and define a future research agenda.
Journal ArticleDOI
Board social capital and excess CEO returns
TL;DR: It is suggested that powerful CEOs and institutional investors may facilitate or constrain the normative pressures existing in the social network and alter the effects of board social capital on excess CEO returns.
References
More filters
Book ChapterDOI
Firm Resources and Sustained Competitive Advantage
TL;DR: In this article, the authors examined the link between firm resources and sustained competitive advantage and analyzed the potential of several firm resources for generating sustained competitive advantages, including value, rareness, imitability, and substitutability.
Journal ArticleDOI
A Dynamic Theory of Organizational Knowledge Creation
TL;DR: In this paper, the authors propose a paradigm for managing the dynamic aspects of organizational knowledge creating processes, arguing that organizational knowledge is created through a continuous dialogue between tacit and explicit knowledge.
Journal ArticleDOI
Strategic assets and organizational rent
TL;DR: In this article, the authors focus on the linkages between the industry analysis framework, the resource-based view of the firm, behavioral decision biases and organizational implementation issues, and connect the concept of Strategic Industry Factors at the market level with the notion of Strategic Assets at the firm level.
Journal ArticleDOI
Moral Hazard and Observability
TL;DR: In this article, the role of imperfect information in a principal-agent relationship subject to moral hazard is considered, and a necessary and sufficient condition for imperfect information to improve on contracts based on the payoff alone is derived.
Journal ArticleDOI
The Impact Of Human Resource Management Practices On Turnover, Productivity, And Corporate Financial Performance
TL;DR: In this article, the authors comprehensively evaluated the links between systems of high performance work practices and firm performance and found that these practices have an economically and statistically significant impact on both intermediate employee outcomes (turnover and productivity) and short and long-term measures of corporate financial performance.
Related Papers (5)
Multitask Principal–Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design
Bengt Holmstrom,Paul Milgrom +1 more