Talent, Human Capital and Finance
Sunday, Jan. 7, 2018 8:00 AM - 10:00 AM
- Chair: Iftekhar Hasan, Fordham University
Drivers of Effort: Evidence From Employee Absenteeism
AbstractWe use detailed information on individual absent spells of all employees in 4,140 firms in Denmark to document large differences across firms in average absenteeism. Using employees who switch firms, we decompose absent days into an individual component (e.g., motivation, work ethic) and a firm component (e.g., incentives, corporate culture). We find that the firm component explains a large fraction of the difference in absenteeism across firms. We present suggestive evidence of the mechanisms behind the firm effect. After controlling for selection of employees into firms, family firm status and concentrated ownership are strongly correlated with decreases in absenteeism. Taken together the evidence supports the importance of firm level mechanisms in eliciting effort from existing employees.
Turnover Stars and the Value of Human Capital: A Pseudo-natural Experiment with Evidence From Broadway Shows
AbstractThe theater provides a quasi-natural experiment for testing the direct impact of key personnel changes in complex organizations. Theater shows routinely turn-over actors in lead roles for a variety of reasons. However, all other elements of the show remain in place, including the director, the script, other actors and the physical theater environment. Even the lines stay the same. Our analysis focuses on transitions between top featured cast members in long-running Broadway shows. We compare sales, capacity and ticket prices just before and just after the change in cast. We also characterize the performers in various ways, and control for the attributes of the show, as well as for team characteristics. We find that only the most talented theater stars affect the financial success of theater shows, supporting the MacDonald (1988) version of the superstar hypothesis. A transition from a “non-star” to a “star” results in higher ticket prices and higher revenues. However, movie stars and well known stars from other fields of the performing arts do not seem to have a significant effect on prices or revenues. Teams are important, and a departure of a team or someone who had worked with the current cast before is detrimental to the performance of the show. Seasonal effects are important as well.
Do Trade Creditors Increase Employee Layoffs in Firms With a Works Council?
AbstractIn this paper, we investigate whether or not trade creditors use the employment risk channel to protect the value of their claims in the buying-firm with a works council that is empowered to specify the criteria, the protocol, and the pecking order for laying off employees. We find that the works councils do not act as employment insurers by blunting the disciplinary role of employee layoffs. The evidence suggests that trade creditors prefers to lay off older employees. The disciplinary effect of trade debt appears to be weaker when employee-leadership within the works council is more fractured or have more younger workers representatives. The results appear to be robust for alternative mechanisms.
- G3 - Corporate Finance and Governance
- J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining