The Value of Culture
Saturday, Jan. 5, 2019 10:15 AM - 12:15 PM
- Chair: Jillian Grennan, Duke University
Corporate Culture as an Implicit Contract
AbstractThis paper empirically studies the role of culture as an implicit contract, using connections among coworkers as a measure of employee culture. We first develop simple measures of firm internal connectivity based on LinkedIn's network data, and show these measures are strongly correlated with external ratings of employee relations and satisfaction. We then test the hypothesis that culture is a tool to form implicit contracts. Using state-level changes to employment agreements as shocks to explicit contracts, we show that these changes significantly impact employees in weakly connected firms, but the effects dissipate for strongly connected firms. Our results suggest that strong connectivity reduces the firm's dependence on explicit contracts to retain human capital.
The Impact of Socioeconomic and Cultural Differences on Online Trade
AbstractWe use eBay data to investigate how trade in the U.S. is influenced by between-state differences in socioeconomic characteristics, tastes, and trust. States’ similarity in cultural characteristics (ethnicity, religiosity, and political behavior) is predictive of online trade patterns. This is partly due to correlation between cultural markers and consumers’ tastes. Consumers are also less likely to trade with dissimilar partners who lack extensive reputations or certification, which suggests that consumers infer seller trustworthiness from cultural similarity. There is no correlation between cultural similarity and buyer satisfaction, however, suggesting that perceived differences in trustworthiness are not validated by actual transactions.
- G4 - Behavioral Finance
- G2 - Financial Institutions and Services