Reaching for the stars: Who pays for talent in innovative industries?

Fredrik Andersson; Matthew Freedman; John Haltiwanger; Julia Lane; Kathryn Shaw

doi:10.1111/j.1468-0297.2009.02277.x

Reaching for the stars: Who pays for talent in innovative industries?

Fredrik Andersson, Matthew Freedman, John Haltiwanger, Julia Lane, Kathryn Shaw

Research output: Contribution to journal › Article › peer-review

Abstract

Innovative firms need to hire and motivate highly talented workers. This article connects the potential returns to innovation to the structure of compensation for skilled employees. We show that the software firms that operate in software sectors with high potential upside gains to innovation pay more to 'star' workers than do other firms that operate in stable markets. Firms operating in product domains with highly skewed positive returns pay employees more in up-front starting salaries and offer higher compensation growth. The large estimated effects on earnings are robust to the inclusion of a wide range of controls for worker and firm characteristics.

Original language	English (US)
Pages (from-to)	F308-F332
Journal	Economic Journal
Volume	119
Issue number	538
DOIs	https://doi.org/10.1111/j.1468-0297.2009.02277.x
State	Published - 2009

ASJC Scopus subject areas

Economics and Econometrics

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10.1111/j.1468-0297.2009.02277.x

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abstract = "Innovative firms need to hire and motivate highly talented workers. This article connects the potential returns to innovation to the structure of compensation for skilled employees. We show that the software firms that operate in software sectors with high potential upside gains to innovation pay more to 'star' workers than do other firms that operate in stable markets. Firms operating in product domains with highly skewed positive returns pay employees more in up-front starting salaries and offer higher compensation growth. The large estimated effects on earnings are robust to the inclusion of a wide range of controls for worker and firm characteristics.",

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Reaching for the stars: Who pays for talent in innovative industries?

Abstract

ASJC Scopus subject areas

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