nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2014‒02‒21
nine papers chosen by
Tommaso Reggiani
University of Cologne

  1. Hierarchical Organization and Performance Inequality: Evidence from Professional Cycling By Bertrand Candelon; Arnaud Dupuy
  2. Peer Effects and Students’ Self-Control By Buechel, Berno; Mechtenberg, Lydia; Petersen, Julia
  3. Human Well-being and In-Work Benefits: A Randomized Controlled Trial By Dorsett, Richard; Oswald, Andrew J.
  4. Leadership and incentives. By Cappelen, Alexander W.; Reme, Bjørn-Atle; Sørensen, Erik Ø.; Tungodden, Bertil
  5. CEO Monitoring and board effectiveness - Resolving CEO compensation issue By Chiraz Ben Ali; Frédéric Teulon
  6. How well do you need to know it to use it? By Yulia Tyumeneva; Alena Valdman; Martin Carnoy
  7. The influence of CEO departure type and board characteristics on firm performance By Wided Bouaine; Lanouar Charfeddine; Mohamed Arouri; Frédéric Teulon
  8. Women on French Corporate Board of Directors- How Do They Differ from their Male Counterparts? By Rey Dang; Anne-Françoise Bender; Marie-José Scotto
  9. Human capital, basic research, and applied research: Three dimensions of human knowledge and their differential growth effects By Prettner, Klaus; Werner, Katharina

  1. By: Bertrand Candelon; Arnaud Dupuy
    Abstract: This paper proposes an equilibrium theory of the organization of work in an economy with an implicit market for productive time. In this market, agents buy or sell productive time. This implicit market gives rise to the formation of teams, organized in hierarchies with one leader (buyer) at the top and helpers (sellers) below. Relative to autarky, hierarchical organization leads to higher within and between team payo¤s/productivity inequality. This prediction is tested empir ically in the context of professional road cycling. We show that the observed rise in performance inequality in the peloton since the 1970s is merely due to a rise in help intensity within team and consistent with a change in the hierarchical organization of teams.
    Keywords: Hierarchical organization, productive time, helping time,inequality, professional cycling.
    JEL: D2 D3 L22
    Date: 2014–01–06
  2. By: Buechel, Berno; Mechtenberg, Lydia; Petersen, Julia
    Abstract: We conducted a multi-wave field experiment to study the interaction of peer effects and self-control among undergraduate students. We use a behavioral measure of self-control based on whether students achieve study related goals they have set for themselves. We find that both self-control and the number of talented friends increase students’ performance. We then set out to test the theoretical prediction of Battaglini, Bénabou and Tirole (2005) that (only) sufficiently self-controlled individuals profit from interactions with peers. We find that peers with high self-control are more likely to connect to others, have a higher overall number of friends and have a higher number of talented friends. Moreover, positive news about self-controlled behavior of their peers increases students’ own perseverance. Hence, our findings are consistent with the model of Battaglini, Bénabou and Tirole. In addition, we find that female students are more likely to have high self-control, but do not outperform male students. One reason for this is that female students have a lower number of talented friends than their male counterparts, thereby profiting less from positive peer effects.
    Keywords: Self-control; Peer Influence; Social Networks; Goals; Time preferences; Procrastination; Willpower; School Performance; Experiment
    JEL: C93 D85 I21 J24
    Date: 2014–01–28
  3. By: Dorsett, Richard (National Institute of Economic and Social Research (NIESR)); Oswald, Andrew J. (University of Warwick)
    Abstract: Many politicians believe they can intervene in the economy to improve people's lives. But can they? In a social experiment carried out in the United Kingdom, extensive in-work support was randomly assigned among 16,000 disadvantaged people. We follow a sub-sample of 3,500 single parents for 5 ensuing years. The results reveal a remarkable, and troubling, finding. Long after eligibility had ceased, the treated individuals had substantially lower psychological well-being, worried more about money, and were increasingly prone to debt. Thus helping people apparently hurt them. We discuss a behavioral framework consistent with our findings and reflect on implications for policy.
    Keywords: randomized controlled trials, government policy, in-work benefits, wage subsidies, well-being, happiness
    JEL: I31 D03 D60 H11 J38
    Date: 2014–02
  4. By: Cappelen, Alexander W. (Dept. of Economics, Norwegian School of Economics and Business Administration); Reme, Bjørn-Atle (Dept. of Economics, Norwegian School of Economics and Business Administration); Sørensen, Erik Ø. (Dept. of Economics, Norwegian School of Economics and Business Administration); Tungodden, Bertil (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: We study how leader compensation affects public goods provision. We report from a lab experiment with four treatments, where the base treatment was a standard public goods game with simultaneous contribution decisions, while the three other treatments allowed participants to volunteer to be the leader in their group and make their contribution before the others. In the three leader treatments, we manipulate the level of compensation given to the leader. Our main finding is that a moderate compensation to the leader is highly beneficial, it increases the average contribution by 63% relative to a situation where the leader is not compensated and by more than 90% relative to a situation without a leader. A further increase in the leader compensation, however, is detrimental to public goods provision; it attracts less morally motivated leaders and creates a social crowding-out effect that makes it harder to lead by example. Finally, we report from a survey showing that the social crowding-out effect is also present in the population at large. We argue that the main findings of the paper are important in many real life settings where we would like to use economic incentives to encourage people to lead by example.
    Keywords: Lab experiment; leadership; compensation.
    JEL: C91 C92 D63
    Date: 2014–02–11
  5. By: Chiraz Ben Ali; Frédéric Teulon
    Abstract: Similar to the Security Exchange Commission (SEC), the French Stock Exchange Authority (AMF) issued new board requirements to enhance manager control after financial scandals (2008-2009). This study investigates the relation between corporate governance and CEO pay levels after taking into acc²ount unobservable firm effects, time-varying industry effects, size, and performance. Using a sample of 290 firm-years observations from SBF 120 Index companies (2009-2011), we find that CEO pay is positively associated to (1) board size, (2) the number of board meetings and (3) compensation committee independence. Consistent with Guthrie et al. (2012) findings, our results suggest serious doubt on the effectiveness of new independence board requirement in constraining CEO compensation as suggested by the managerial power hypothesis.
    Keywords: Board of directors,Board meeting frequency, CEO compensation, Corporate governance.
    Date: 2014–01–06
  6. By: Yulia Tyumeneva (National Research University Higher School of Economics); Alena Valdman; Martin Carnoy (Stanford University. Vida Jacks Professor of Education.)
    Abstract: There is currently a large body of literature about applying knowledge gained in class to real-life situations. However, comparatively little is known about how a student’s mastery of the material affects his or her ability to transfer this knowledge to unfamiliar settings. Our research seeks to illuminate the relationship between a student’s subject mastery level and his or her knowledge transfer to out-of-subject contexts. We use data from TIMSS mathematics (8 grade) and PISA mathematics to evaluate the link between subject mastery level – in this case, the mastery level of mathematics – and the transfer of learned math. Building off previous discussions of TIMSS and PISA test differences, we consider TIMSS performance as the mastery level of school mathematics, and PISA performance as the ability to transfer learned math to an out-of-subject context. The sample included 4,241 Russian students who took part in both the TIMSS 2011 and PISA 2012 cycles. In our study, we first divide the students into six groups according to their performance in the TIMSS. Then we identify the most difficult PISA test items based on the Rasch Model. Finally, we determine what percentage of the most difficult PISA items were answered correctly in every TIMSS group. This percentage served as a measure of the ability to successfully transfer knowledge. We found a positive relation between subject mastery level and the ability to transfer learned math to an out-of-subject context. The higher the mastery level of mathematics, the higher the probability that knowledge will be transferred. However, this link was not linear: only the highest mastery level contributed significantly to knowledge transfer. At other mastery levels, the rate of successful transfer differentiated only slightly. These results imply the importance of making certain that students have truly mastered curriculum before moving to new topics. Additionally, the non-linear nature of the link suggests that educators should begin rethinking how test results are interpreted.
    Keywords: transfer, subject knowledge, subject mastery level, out-of-subject context, PISA, TIMSS
    JEL: I21
    Date: 2014
  7. By: Wided Bouaine; Lanouar Charfeddine; Mohamed Arouri; Frédéric Teulon
    Abstract: This paper uses panel data from 271 U.S. firms to empirically examine the relationship between the departure of a firm’s CEO and that firm’s performance. Results of our analysis reveal a significant relationship between CEO departure type and firm performance. Specifically, we found that the departure of entrenched CEOs negatively affects current and future firm performance. Results also demonstrate that board size and the presence of independent administrators moderates the relationship between CEO departure type and firm performance. This suggests that entrenched CEOs can have informal associations with independent administrators.
    Keywords: departure type, current and future performance, board independence,entrenchment.
    Date: 2014–02–12
  8. By: Rey Dang; Anne-Françoise Bender; Marie-José Scotto
    Abstract: Our research aims at exploring individual’s characteristics of women on Boards in the French context. In the first part of our paper, we discuss the different theoretical frameworks which supported the business case of gender diversity on Boards of Directors and expose our hypothesis regarding differences in women and men characteristics. The second part presents our methods, measurements and data. Then, we focus on our empirical study. Our sample consists of the French Index SBF 120 companies. We studied the profile of 1,250 directors collecting information from the firms’ annual reports of year 2010, using various scales defined by previous research on that field in the Anglo–Saxon literature. Our findings confirm that integrating women on boards has an impact on the Human and Social Capital of Boards but not as much as might have been expected. It is worth noting that men and women board members seem to build their human and social capital through the same educational process in France. Nonetheless, our work shows significant differences between men and women regarding professional experience and board member status.
    Keywords: Corporate Governance, Boards of Directors, Diversity, Gender, Board Composition
    Date: 2014–01–06
  9. By: Prettner, Klaus; Werner, Katharina
    Abstract: We analyze the differential growth effects of basic research, applied research, and embodied human capital accumulation in an R&D-based growth model with endogenous fertility and endogenous education. In line with the empirical evidence, our model allows for i) a negative association between long-run economic growth and population growth, ii) a positive association between long-run economic growth and education, and iii) a positive association between the level of per capita GDP and expenditures for basic research. Our results also indicate that raising public investments in basic research reduces the growth rate of GDP in the short run because resources have to be drawn away from other productive sectors of the economy. These short-run costs of basic research might be an explanation for the reluctance of governments to increase public R&D expenditures notwithstanding the long-run benefits of such a policy. --
    Keywords: basic vs. applied science,endogenous schooling decisions,endogenous fertility decisions,R&D-based growth,governmental research policies
    JEL: H41 J11 J24 O32 O41
    Date: 2014

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