The Strategic Implications of Firm-Specific Incentives - Dissertation Executive Summary

Abstract

This three paper dissertation explores the strategic implications of firm-specific incentives . i.e. incentives that are more valuable to workers in their focal firms than similar incentives elsewhere. The first paper develops the theory of firm-specific incentives. The second paper uses data from 7770 software developers in 94 companies to show that firms with more firm-specific incentives have lower voluntary turnover rates and offer lower wage increases to workers over time – i.e. they exhibit lower wage-tenure slopes. The third paper uses data from 271 software firms to show that small firms have advantages offering incentives that are inherently firm-specific.

Keywords: strategy, incentives, human capital, competitive advantage, firms, software, wage, specific