scholarly journals A study on the trade-off between supervision and wages: an empirical test of efficiency wage theory

2005 ◽  
Author(s):  
◽  
Min-Hong Oh
Keyword(s):  
Service Sector ◽  
Wage Differentials ◽  
Interaction Analysis ◽  
Empirical Test ◽  
Negative Relationship ◽  
Wage Structure ◽  
Efficiency Wages ◽  
Efficiency Wage ◽  
Wage Theory ◽  
Using Data

This dissertation investigates the applicability of the shirking version of efficiency wage models in Korea. Analyses is based on the Survey on Wage Structure in the 1980's and 1990's - using data collected in 1983, 1989, 1993, 1996, and 1999. Efficiency wage theory predicts a negative relationship between supervision and wages: employers may choose either to pay a wage premium or to increase the level of supervisory intensity to force workers to exert more effort. The relation between supervisory intensity, as measured by the ratio of supervisors to supervisees in a firm, and wages is explored. Interaction effects between supervisory intensity and employer characteristics on wages are also investigated in more detailed analyses. Finally, we explore whether supervisory intensity is able to explain inter-industry wage differentials. The evidence suggests that supervisory intensity is positively correlated with wages, implying the efficiency wage model is not applicable in Korea. Industrial interaction analysis shows weak evidence of efficiency wages in the social service sector, but there are no apparent patterns in other industries. In occupational interaction analysis, efficiency wages are paid to drivers and sales workers. Although supervisory intensity does not explain wage variation across industries, there are significant inter-industry wage differentials observed in Korea.

scholarly journals Efficiency Wages in Pakistan's Small Scale Manufacturing

1999 ◽  
Vol 4 (1) ◽  
pp. 1-23
Author(s):  
Abid A. Burki
Keyword(s):  
Wage Differentials ◽  
Wage Gap ◽  
Sample Selection ◽  
Manufacturing Firms ◽  
Efficiency Wages ◽  
Sample Selection Bias ◽  
Small Scale ◽  
Efficiency Wage ◽  
Market Clearing ◽  
Using Data

This paper investigates wage differentials between workers in subcontracting and non-subcontracting firms, using data from a recent survey of small manufacturing firms in Gujranwala, Pakistan. The paper finds that subcontracting workers receive a high wage premium and invokes efficiency wage arguments to explain this differential. The paper argues that due to a client/vendor monitoring problem it is optimal for subcontracting firms to pay higher than the market clearing wages. The use of Heckman's two stage procedure to test for sample selection bias fails to give such evidence. A decomposition of the wage differentials indicates that endowment differentials partly explain higher wages for subcontracting workers while the bulk of this wage gap is explained by differential returns to workers' attributes.

scholarly journals Wage differentials by firm size: the efficiency wage test in a developing country

2014 ◽  
Vol 44 (1) ◽  
pp. 45-67
Author(s):  
Tatiane Almeida de Menezes ◽  
Isabel Pessoa de Arruda Raposo
Keyword(s):  
Firm Size ◽  
Wage Differentials ◽  
Wage Differential ◽  
Efficiency Wage ◽  
Switching Regression ◽  
Large Size ◽  
Job Duration ◽  
Wage Theory ◽  
Using Data ◽  
Monthly Survey

Using data from the Brazilian Labor Monthly Survey (PME/ IBGE) for the years of 2006 and 2007, the paper investigates if the wage differential by firm size in Brazil can be explained by the predictions of the Efficiency Wage Theory. It is adopted a Switching Regression Model to estimate if large size companies pay a higher wage premium for dispended labor effort, as compared to smaller enterprises. The results prove the EW predictions since they evidence positive relationships between wages and labor effort, schooling and longer job duration. However, such findings are not sufficient to explain the existence of wage differentials by firm size in the Brazilian labor market.

EFFICIENCY WAGE THEORY: EVIDENCE FOR SINGAPORE MANUFACTURING SECTOR

2014 ◽  
Vol 59 (03) ◽  
pp. 1450021 ◽  
Author(s):  
SIN-CHET CHUA ◽  
YUN-WEN LIM ◽  
TENG-TENG TER ◽  
SOON-BENG CHEW
Keyword(s):  
Manufacturing Sector ◽  
Efficiency Wages ◽  
Least Square ◽  
Efficiency Wage ◽  
Worker Productivity ◽  
Ordinary Least Square ◽  
Econometric Evidence ◽  
Wage Theory

This paper attempts to test whether there is econometric evidence in support of the efficiency wage theory in Singapore's manufacturing sector. Two of the possible ways to account for efficiency wages are to show that higher wages have resulted in reduced shirking by workers, and to show that higher wages have resulted in an increase in worker productivity. We find evidence in support of efficiency wages for three out of 18 industries within the manufacturing sector in Singapore based on both ordinary least square (OLS) and 2SLS regression results, and for another two industries based only on OLS and yet another two industries based only on 2SLS.

The efficiency of wages, profit sharing, and stock

2019 ◽  
Vol 2 (3) ◽  
pp. 222-235
Author(s):  
Dan Weltmann
Keyword(s):  
Design Methodology ◽  
Gift Exchange ◽  
Profit Sharing ◽  
Employee Attitudes ◽  
Exchange Model ◽  
Efficiency Wages ◽  
Efficiency Wage ◽  
Content Type ◽  
The Gift ◽  
Wage Theory

Purpose The purpose of this paper is to examine which forms of compensation are more efficient at affecting employee attitudes, thus extending efficiency wage theory from wage-based compensation to profit sharing and stock-based compensation. Design/methodology/approach Three models of efficiency wage theory were tested: shirking, turnover and gift exchange. The effects of those three modes of compensation (wages, profit sharing and stock) were contrasted for the three models of efficiency wage theory. Findings The findings were that raising wages is the most efficient form of compensation in the turnover and shirking models, while in the gift exchange model profit sharing and stock-based compensation may function like efficiency wages. Originality/value This is the first study of this particular issue.

Frontiers of efficiency wages: unconventional wisdom?

2018 ◽  
Vol 24 (3) ◽  
pp. 300-315
Author(s):  
Rosetta A. Morris Morant ◽  
David C. Jacobs
Keyword(s):  
Resource Management ◽  
Human Resource Management ◽  
Human Resource ◽  
Well Being ◽  
Efficiency Wages ◽  
Management Tool ◽  
Efficiency Wage ◽  
Content Type ◽  
Wage Theory ◽  
The Relationship

Purpose The purpose of this paper is to trace the historical foundation of the efficiency wage theory and examine its conceptual framework against other wage theories, in relation to conventional practices in human resource management. Design/methodology/approach Following a description of various wage theories, a conceptual analysis maps the evolutionary process of efficiency wage theory. Findings The concept of efficiency being applied to wages appears to evolve from Smith. The difference between the classical and the institutionalists’ perspectives appears to be the meaning ascribed to efficiency. Clark seemed to be the first one to examine the relationship between labor and productivity. Webb expanded the meaning of efficiency and demonstrated the relationship with productivity. Institutional and behavioral theorists further developed and advocated for efficiency wages. A synthesis of recent empirical studies provides support for the theory, which challenges conventional human resource management wage practices. Practical implications The findings solidify the usefulness of efficiency wage theory not only as a motivational management tool but also as a source for social and economic well-being. Originality/value The contribution of this historical account is that it synthesizes the root and development of efficiency wages theory. It also highlights the social context of the theory and provides an interface between economic and management perspectives.

Is the bottom line reached? An exploration of supervisor bottom-line mentality, team performance avoidance goal orientation and team performance

2021 ◽  
pp. 001872672110029
Author(s):  
Yuying Lin ◽  
Mengxi Yang ◽  
Matthew J Quade ◽  
Wansi Chen
Keyword(s):  
Goal Orientation ◽  
Team Performance ◽  
Social Information Processing ◽  
Negative Relationship ◽  
Bottom Line ◽  
Team Members ◽  
Processing Theory ◽  
Using Data ◽  
Exclusive Focus ◽  
Avoidance Goal

How do supervisors who treat the bottom line as more important than anything else influence team success? Drawing from social information processing theory, we explore how and when supervisor bottom-line mentality (i.e. an exclusive focus on bottom-line outcomes at the expense of other priorities) exerts influence on the bottom-line itself, in the form of team performance. We argue that a supervisor’s bottom-line mentality provides significant social cues for the team that securing bottom-line objectives is of sole importance, which stimulates team performance avoidance goal orientation, and thus decreases team performance. Further, we argue performing tension (i.e. tension between contradictory needs, demands, and goals), serving as team members’ mutual perception of the confusing environment, will strengthen the indirect negative relationship between supervisor bottom-line mentality and team performance through team performance avoidance goal orientation. We conduct a path analysis using data from 258 teams in a Chinese food-chain company, which provides support for our hypotheses. Overall, our findings suggest that supervisor’s exclusive focus on the bottom-line can serve to impede team performance. Theoretical contributions and practical implications are discussed.

scholarly journals Does Corruption Lead to Lower Subnational Credit Ratings? Fiscal Dependence, Market Reputation, and the Cost of Debt

2021 ◽  
pp. 1-19
Author(s):  
Maciej Sychowiec ◽  
Monika Bauhr ◽  
Nicholas Charron
Keyword(s):  
Credit Ratings ◽  
National Level ◽  
Negative Relationship ◽  
Cost Of Debt ◽  
Economic Implications ◽  
Sovereign Credit Ratings ◽  
Heterogeneous Effects ◽  
Federal Revenue ◽  
Negative Effect ◽  
Using Data

Abstract While studies show a consistent negative relationship between the level of corruption and range indicators of national-level economic performance, including sovereign credit ratings, we know less about the relationship between corruption and subnational credit ratings. This study suggests that federal transfers allow states with higher levels of corruption to retain good credit ratings, despite the negative economic implications of corruption more broadly, which also allows them to continue to borrow at low costs. Using data on corruption conviction in US states and credit ratings between 2001 and 2015, we show that corruption does not directly reduce credit ratings on average. We find, however, heterogeneous effects, in that there is a negative effect of corruption on credit ratings only in states that have a comparatively low level of fiscal dependence on federal transfers. This suggest that while less dependent states are punished by international assessors when seen as more corrupt, corruption does not affect the ratings of states with higher levels of fiscal dependence on federal revenue.

What drives housing prices, rent and new construction in China

2017 ◽  
Vol 10 (5) ◽  
pp. 662-686
Author(s):  
Dimitrios Staikos ◽  
Wenjun Xue
Keyword(s):  
Real Estate ◽  
Empirical Test ◽  
Housing Prices ◽  
Panel Cointegration ◽  
Real Estate Market ◽  
Estimation Methods ◽  
Content Type ◽  
New Construction ◽  
Using Data ◽  
First Time

Purpose With this paper, the authors aim to investigate the drivers behind three of the most important aspects of the Chinese real estate market, housing prices, housing rent and new construction. At the same time, the authors perform a comprehensive empirical test of the popular 4-quadrant model by Wheaton and DiPasquale. Design/methodology/approach In this paper, the authors utilize panel cointegration estimation methods and data from 35 Chinese metropolitan areas. Findings The results indicate that the 4-quadrant model is well suited to explain the determinants of housing prices. However, the same is not true regarding housing rent and new construction suggesting a more complex theoretical framework may be required for a well-rounded explanation of real estate markets. Originality/value It is the first time that panel data are used to estimate rent and new construction for China. Also, it is the first time a comprehensive test of the Wheaton and DiPasquale 4-quadrant model is performed using data from China.

Workplace disability and job satisfaction in Britain: A co-worker test?

2021 ◽  
pp. 0143831X2110142
Author(s):  
Getinet Astatike Haile
Keyword(s):  
Job Satisfaction ◽  
Negative Relationship ◽  
Organisational Culture ◽  
Seemingly Unrelated Regression ◽  
Unrelated Regression ◽  
Significant Negative Relationship ◽  
Using Data

The article examines the link between workplace disability (WD) and workplace job satisfaction (JS) using data from WERS2011. Controlling for a rich set of workplace characteristics including organisational culture, the study finds a significant negative relationship between JS and the share of disabled respondents within workplaces. Notably, Seemingly Unrelated Regression (SUR)-based analysis distinguishing between disabled and non-disabled respondents reveals that the negative relationship found is specific to non-disabled respondents. Moreover, disability equality policies are found to be significantly positively related with disabled respondents’ JS while they are negatively related with the JS of their non-disabled counterparts. The article ponders if there is a co-worker aspect to the WD–JS link and whether HR policies may need to take heed of co-worker dynamics in this respect.

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