Profitability, investment, and efficiency wages

Rent-Sharing, Hold-up, and Wages: Evidence from Matched Panel Data

Rent-Sharing, Hold-up, and Wages: Evidence from Matched Panel Data It is widely believed that rent-sharing reduces the incentives for investment when long term contracts are infeasible because some of the returns to sunk capital are captured by workers. We propose a simple test for the degree of hold-up based on the fraction of capital costs that are deducted from the quasi-rent that determines...

Information Technology and Corporate Profitability: A Focus on Operating Efficiency

Information Technology and Corporate Profitability: A Focus on Operating Efficiency Stephan Kudyba, New Jersey Institute of Technology, USA Donald Vitaliano, Rensselaer Polytechnic Institute, USA This work involves an empirical analysis, incorporating firm-level investment in information technology and financial statement information. The results indicate that IT can enhance firm level profitab...

Investment, Efficiency, and Credit Rationing: Evidence from Hungarian Panel Data

Relying upon a rich and unique panel of Hungarian firms over 7 years, from 1992 up to 1998, this paper estimates simultaneously TFP, Total Factor Productivity, identified as efficiency, and the parameters of a model where investment depends upon internal funds, wages, and sales, as in Prasnikar J. and Svejnar J. (2000). It shows that while real investment is higher in foreign firms, the improve...

Rewarding Idleness

Market wages re ect expected productivity, making use of signals of past performance and past experience. These signals are generated at least partially on the job, creating incentives for agents to choose high pro le and highly visible tasks. When agents have private information about the profitability of di erent tasks, rms may wish to prevent over-investment in those that entail signaling, b...

Testing For Efficiency Wages In Iran