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Title:The effect of adversity on process innovations and managerial incentives PDF Logo
Authors:Dostie, Benoît
Jayaraman, Rajshri
Issue Date:2009
Series/Report no.:IZA Discussion Papers 4261
Abstract:This paper asks whether adversity spurs the introduction of process innovations and increases the use of managerial incentives by firms. Using a large panel data set of workplaces in Canada, our identification strategy relies on exogenous variation in adversity arising from increased border security along the 49th parallel following 9/11. Our longitudinal difference-in-differences estimates indicate that firms responded to adversity by introducing new or improved processes, but did not change their use of managerial incentives. These results suggest that the threat of bankruptcy may provide impetus for improving efficiency.
Subjects:Process innovation
managerial incentives
efficiency
natural experiment
JEL:L20
O31
M52
J33
Persistent Identifier of the first edition:urn:nbn:de:101:1-20090720312
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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