Ludwig (Interview)
About the CIA and a glass of red wine ... Professor Dr Udo Ludwig on the beginnings of our institute The core of the IWH founding team came from the Institute for Applied Economic…
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Heimpold (Interview)
What South Korea has to do with the IWH ... Gerhard Heimpold about his experiences at IWH Mr Heimpold, if you were to describe your job to your neighbour, what would you tell her?…
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Lack of Selection and Limits to Delegation: Firm Dynamics in Developing Countries
Ufuk Akcigit, Harun Alp, Michael Peters
American Economic Review,
No. 1,
2021
Abstract
Delegating managerial tasks is essential for firm growth. Most firms in developing countries, however, do not hire outside managers but instead rely on family members. In this paper, we ask if this lack of managerial delegation can explain why firms in poor countries are small and whether it has important aggregate consequences. We construct a model of firm growth where entrepreneurs have a fixed time endowment to run their daily operations. As firms grow large, the need to hire outside managers increases. Firms’ willingness to expand therefore depends on the ease with which delegation can take place. We calibrate the model to plant-level data from the U.S. and India. We identify the key parameters of our theory by targeting the experimental evidence on the effect of managerial practices on firm performance from Bloom et al. (2013). We find that inefficiencies in the delegation environment account for 11% of the income per capita difference between the U.S. and India. They also contribute to the small size of Indian producers, but would cause substantially more harm for U.S. firms. The reason is that U.S. firms are larger on average and managerial delegation is especially valuable for large firms, thus making delegation efficiency and other factors affecting firm growth complements.
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Wage Delegation in the Field
Sabrina Jeworrek, Vanessa Mertins
Journal of Economics and Management Strategy,
No. 4,
2019
Abstract
By conducting a natural field experiment, we analyze the managerial policy of delegating the wage choice to employees. We find that this policy enhances performance significantly, which is remarkable since allocated wage premiums of the same size have no effect at all. Observed self‐imposed wage restraints and absence of negative peer effects speak in favor of wage delegation, although the chosen wage premium levels severely dampen its net value. Additional experimental and survey data provide important insights into employees' underlying motivations.
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The Behavioral Impact of Non-Monetary Workplace Characteristics
Sabrina Jeworrek
Schriftenreihe innovative betriebswirtschaftliche Forschung und Praxis,
No. 465,
2016
Abstract
This book investigates the impact of non-monetary workplace characteristics ― i.e. employee voice, task characteristics, and the provision of information ― on workers’ individual decision making and workplace performance. Given the neoclassical assumption of purely self-interested and completely rational utility maximizing individuals, workplace characteristics should be of little interest as long as they are not directly related to payment issues, so that a worker’s utility maximizing effort choice given a fixed wage level remains unaffected. Recent empirical findings, however, suggest that the use of non-monetary incentives might even be the better option to increase work performance. Three out of the four experimental studies covered by this book extend the previous research by providing more reliable insights into field behavior than conventional laboratory experiments. Given e.g. the right to self-determine one’s wage, almost all participants in the laboratory opt for the highest possible wage. Within the context of an inventory taking with 140 assistants, we conducted a natural field experiment and show that most workers ask for rather moderate wages with women being particularly conservative in their demands. Notwithstanding, wage delegation causes workers’ performance to rise and, hence, stresses the relevance of voice at the workplace. Furthermore, we provide evidence that workers also care for the content and the meaningfulness of their tasks. Uselessly exerted effort, for instance, reduces work performance as regards a completely unrelated task in the future. Taken together, the field experimental evidence presented in this book indicates that if employees find a workplace which matches their preferences, it is quite likely to be a beneficial situation not only for the employee but also for the employer. Overall good working conditions can even help workers overlook unequal treatments within the workforce, at least in the short-run and as long as there is a plausible reason for it. An additional laboratory experiment, however, suggests that additional information, e.g. about potential coworkers, might be necessary to make reasonable decisions in accordance with individual preferences.
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The Dilemma of Delegating Search: Budgeting in Public Employment Services
Martin Altemeyer-Bartscher, J. T. Addison, T. Kuhn
IZA Discussion Papers, No. 5170,
No. 5170,
2010
Abstract
The poor performance often attributed to many public employment services may be explained in part by a delegation problem between the central office and local job centers. In markets characterized by frictions, job centers function as match-makers, linking job seekers with relevant vacancies. Because their search intensity in contacting employers and collecting data is not verifiable by the central authority, a typical moral hazard problem can arise. To overcome the delegation problem and provide high-powered incentives for high levels of search effort on the part of job centers, we propose output-related schemes that assign greater staff capacity to agencies achieving high strike rates.
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Components of a municipal finance reform: Trade tax and public assistance – Expert report for the Bundestag group Bündnis 90 / Die Grünen
Thomas Notheis, Martin Junkernheinrich
IWH-Sonderhefte,
No. 1,
1996
Abstract
Die Reform des Gemeindesteuersystems steht bereits seit Jahren auf der politischen Tagesordnung. Mittlerweile haben sich die kontroversen Positionen zwischen Bundesgesetzgeber, Wirtschaft und Kommunen deutlich angenähert. Die weit fortgeschrittene Aushöhlung der Gewerbesteuer und die zunehmende Delegation von ausgabenintensiven Aufgaben auf die lokale Ebene haben die Verhandlungsposition der Städte und Gemeinden geschwächt. Für viele Kämmerer dominiert das fiskalische Deckungsziel, so daß man auch Reformmodelle zu akzeptieren bereit ist, die man lange und mit Gründen abgelehnt hat.
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