Executive turnover revisited from an efficiency wage perspective

We develop theoretical arguments from the efficiency wage model (Shapiro & Stiglitz, 1984) to provide better understanding of Fama's (1980) seminal notion that executive labor markets contribute to the alignment of executive and shareholder interests. We show how the efficiency wage model can be integrated with several other theories of executive turnover. Furthermore, the model allows for predictions that have received very little analysis to date, such as the effect of firm risk and executive salaries on turnover. We test predictions from the model on a sample of executives from 280 manufacturing firms observed annually from 1986 to 1992. Our sample includes data on over 12,000 observations and nearly 1,700 employment terminations. The results are consistent with the main predictions of the efficiency wage model. Holding performance constant, boards of directors are less patient with (more likely to dismiss) executives who have lower salaries and those in higher risk firms.A partir del modelo de salarios de eficiencia (Shapiro & Stiglitz, 1984) se desarrollan argumentos teóricos para una mejor comprensión de como el mercado laboral ayuda a alinear los intereses de directivos y accionistas. El modelo se puede integrar con la mayoría de teorías relacionadas con la rotación de altos directivos. Además se deducen predicciones escasamente analizadas como es el efecto del riesgo empresarial y los salarios de los gestores en la rotación de los directivos . Dichas predicciones se contrastan en una muestra de altos ejecutivos pertenecientes a 280 empresas industriales sobre las cuales se recoge información anual desde el año 1986 hasta 1992. La muestra contiene más de 12.000 observaciones y cerca de 1.700 rotaciones de directivos. Los resultados son consistentes con las principales predicciones del modelo teórico. Ante niveles similares de resultados, los consejos de administración son menos pacientes (mayores probabilidades de cese) con aquellos directivos peor retribuidos y en empresas de mayor riesg

Kilonova Luminosity Function Constraints Based on Zwicky Transient Facility Searches for 13 Neutron Star Merger Triggers during O3

We present a systematic search for optical counterparts to 13 gravitational wave (GW) triggers involving at least one neutron star during LIGO/Virgo's third observing run (O3). We searched binary neutron star (BNS) and neutron star black hole (NSBH) merger localizations with the Zwicky Transient Facility (ZTF) and undertook follow-up with the Global Relay of Observatories Watching Transients Happen (GROWTH) collaboration. The GW triggers had a median localization area of 4480 deg², a median distance of 267 Mpc, and false-alarm rates ranging from 1.5 to 10⁻²⁵ yr⁻¹. The ZTF coverage in the g and r bands had a median enclosed probability of 39%, median depth of 20.8 mag, and median time lag between merger and the start of observations of 1.5 hr. The O3 follow-up by the GROWTH team comprised 340 UltraViolet/Optical/InfraRed (UVOIR) photometric points, 64 OIR spectra, and three radio images using 17 different telescopes. We find no promising kilonovae (radioactivity-powered counterparts), and we show how to convert the upper limits to constrain the underlying kilonova luminosity function. Initially, we assume that all GW triggers are bona fide astrophysical events regardless of false-alarm rate and that kilonovae accompanying BNS and NSBH mergers are drawn from a common population; later, we relax these assumptions. Assuming that all kilonovae are at least as luminous as the discovery magnitude of GW170817 (−16.1 mag), we calculate that our joint probability of detecting zero kilonovae is only 4.2%. If we assume that all kilonovae are brighter than −16.6 mag (the extrapolated peak magnitude of GW170817) and fade at a rate of 1 mag day⁻¹ (similar to GW170817), the joint probability of zero detections is 7%. If we separate the NSBH and BNS populations based on the online classifications, the joint probability of zero detections, assuming all kilonovae are brighter than −16.6 mag, is 9.7% for NSBH and 7.9% for BNS mergers. Moreover, no more than 10⁻⁴, or φ > 30° to be consistent with our limits. We look forward to searches in the fourth GW observing run; even 17 neutron star mergers with only 50% coverage to a depth of −16 mag would constrain the maximum fraction of bright kilonovae to <25%

Multi-messenger observations of a binary neutron star merger

On 2017 August 17 a binary neutron star coalescence candidate (later designated GW170817) with merger time 12:41:04 UTC was observed through gravitational waves by the Advanced LIGO and Advanced Virgo detectors. The Fermi Gamma-ray Burst Monitor independently detected a gamma-ray burst (GRB 170817A) with a time delay of ~1.7 s with respect to the merger time. From the gravitational-wave signal, the source was initially localized to a sky region of 31 deg2 at a luminosity distance of 40+8-8 Mpc and with component masses consistent with neutron stars. The component masses were later measured to be in the range 0.86 to 2.26 Mo. An extensive observing campaign was launched across the electromagnetic spectrum leading to the discovery of a bright optical transient (SSS17a, now with the IAU identification of AT 2017gfo) in NGC 4993 (at ~40 Mpc) less than 11 hours after the merger by the One- Meter, Two Hemisphere (1M2H) team using the 1 m Swope Telescope. The optical transient was independently detected by multiple teams within an hour. Subsequent observations targeted the object and its environment. Early ultraviolet observations revealed a blue transient that faded within 48 hours. Optical and infrared observations showed a redward evolution over ~10 days. Following early non-detections, X-ray and radio emission were discovered at the transient’s position ~9 and ~16 days, respectively, after the merger. Both the X-ray and radio emission likely arise from a physical process that is distinct from the one that generates the UV/optical/near-infrared emission. No ultra-high-energy gamma-rays and no neutrino candidates consistent with the source were found in follow-up searches. These observations support the hypothesis that GW170817 was produced by the merger of two neutron stars in NGC4993 followed by a short gamma-ray burst (GRB 170817A) and a kilonova/macronova powered by the radioactive decay of r-process nuclei synthesized in the ejecta

Multi-messenger Observations of a Binary Neutron Star Merger

On 2017 August 17 a binary neutron star coalescence candidate (later designated GW170817) with merger time 12:41:04 UTC was observed through gravitational waves by the Advanced LIGO and Advanced Virgo detectors. The Fermi Gamma-ray Burst Monitor independently detected a gamma-ray burst (GRB 170817A) with a time delay of ∼ 1.7 {{s}} with respect to the merger time. From the gravitational-wave signal, the source was initially localized to a sky region of 31 deg2 at a luminosity distance of {40}-8+8 Mpc and with component masses consistent with neutron stars. The component masses were later measured to be in the range 0.86 to 2.26 {M}ȯ . An extensive observing campaign was launched across the electromagnetic spectrum leading to the discovery of a bright optical transient (SSS17a, now with the IAU identification of AT 2017gfo) in NGC 4993 (at ∼ 40 {{Mpc}}) less than 11 hours after the merger by the One-Meter, Two Hemisphere (1M2H) team using the 1 m Swope Telescope. The optical transient was independently detected by multiple teams within an hour. Subsequent observations targeted the object and its environment. Early ultraviolet observations revealed a blue transient that faded within 48 hours. Optical and infrared observations showed a redward evolution over ∼10 days. Following early non-detections, X-ray and radio emission were discovered at the transient’s position ∼ 9 and ∼ 16 days, respectively, after the merger. Both the X-ray and radio emission likely arise from a physical process that is distinct from the one that generates the UV/optical/near-infrared emission. No ultra-high-energy gamma-rays and no neutrino candidates consistent with the source were found in follow-up searches. These observations support the hypothesis that GW170817 was produced by the merger of two neutron stars in NGC 4993 followed by a short gamma-ray burst (GRB 170817A) and a kilonova/macronova powered by the radioactive decay of r-process nuclei synthesized in the ejecta.</p

Does Desperation Breed Deceiver? A Behavioral Model of New Venture Opportunism

We develop a behavioral-decision model to highlight entrepreneurs' decision making behind venture opportunism. We find that opportunism can present to entrepreneurs and their new ventures a risky yet beneficial choice to secure short-term gains at potential social costs. We posit that, motivated by loss aversion, entrepreneurs may accept the risk and engage in opportunism when their ventures confront economic losses. For instance, a high risk of venture failure may motivate entrepreneurs to act opportunistically in the hope that the failure can be averted. We further posit that such loss-averse decisions will be moderated by the entrepreneurs' personal bonds to their new ventures. That is, the scale of entrepreneurs' personal investment in their ventures will intensify their economic loss aversion posed by venture failure risk. In contrast, when entrepreneurs use their personal social capital to support their ventures, they will personally bear more of the down-side risks of opportunistic behavior and thus be less likely to act opportunistically to countervail a potential economic loss. Results based on the data collected from 244 NEEQ-listed new ventures in Beijing and Tianjin in China support our predictions.24 month embargo; published online: 23 January 2018This item from the UA Faculty Publications collection is made available by the University of Arizona with support from the University of Arizona Libraries. If you have questions, please contact us at [email protected]

Executive turnover revisited from an efficiency wage perspective

We develop theoretical arguments from the efficiency wage model (Shapiro & Stiglitz, 1984) to provide better understanding of Fama's (1980) seminal notion that executive labor markets contribute to the alignment of executive and shareholder interests. We show how the efficiency wage model can be integrated with several other theories of executive turnover. Furthermore, the model allows for predictions that have received very little analysis to date, such as the effect of firm risk and executive salaries on turnover. We test predictions from the model on a sample of executives from 280 manufacturing firms observed annually from 1986 to 1992. Our sample includes data on over 12,000 observations and nearly 1,700 employment terminations. The results are consistent with the main predictions of the efficiency wage model. Holding performance constant, boards of directors are less patient with (more likely to dismiss) executives who have lower salaries and those in higher risk firms.A partir del modelo de salarios de eficiencia (Shapiro & Stiglitz, 1984) se desarrollan argumentos teóricos para una mejor comprensión de como el mercado laboral ayuda a alinear los intereses de directivos y accionistas. El modelo se puede integrar con la mayoría de teorías relacionadas con la rotación de altos directivos. Además se deducen predicciones escasamente analizadas como es el efecto del riesgo empresarial y los salarios de los gestores en la rotación de los directivos . Dichas predicciones se contrastan en una muestra de altos ejecutivos pertenecientes a 280 empresas industriales sobre las cuales se recoge información anual desde el año 1986 hasta 1992. La muestra contiene más de 12.000 observaciones y cerca de 1.700 rotaciones de directivos. Los resultados son consistentes con las principales predicciones del modelo teórico. Ante niveles similares de resultados, los consejos de administración son menos pacientes (mayores probabilidades de cese) con aquellos directivos peor retribuidos y en empresas de mayor riesg

Social capital among corporate upper echelons and its impacts on executive promotion in Korea

Our study provides both theory and evidence about the effect of social capital possessed by individual managers of Korean corporations on their likelihood of promotion to the next hierarchical level. We argue that (1) executive social capital can be dimensionalized into internal and external components, and both components are positively associated with executive promotion and (2) the effects of social capital on promotion are moderated by several contextual factors. We tested our hypotheses with a sample of 4759 executives in 199 large Korean companies from 1990 through 1999. The results provide strong support for the predicted main effects, but limited support for the predicted moderation effects.

Strategic Leadership Theory and Research on Executives Top Management Teams and Boards

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