Marginal returns to talent for material risk takers in banking / Moritz Stieglitz, Konstantin Wagner
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Marginal returns to talent for material risk takers in banking
Discovery
1737634163
URN
urn:nbn:de:gbv:3:2-127618
DOI
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Publication history
Halle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, [02. November 2020]
Content
1 Online-Ressource (III, 37 Seiten, 2,72 MB) : Diagramme
Edition
Language
eng
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Abstract
Economies of scale can explain compensation differentials over time, across firms of different size, different hierarchy-levels, and different industries. Consequently, the most talented individuals tend to match with the largest firms in industries where marginal returns to their talent are greatest. We explore a new dimension of this size-pay nexus by showing that marginal returns also differ across activities within firms and industries. Using hand-collected data on managers in European banks well below the level of executive directors, we find that the size-pay nexus is strongest for investment banking business units and for banks with a market-based business model. Thus, managerial compensation is most sensitive to size increases for activities that can easily be scaled up.
Series
IWH-Diskussionspapiere ; 2020, no. 20 (November 2020) ppn:837399270