Corporate Governance and the Firm's Workforce

45 Pages Posted: 17 Apr 2016

See all articles by Inessa Liskovich

Inessa Liskovich

University of Texas at Austin - Department of Finance

Date Written: April 15, 2016

Abstract

This paper uses matched employer-employee data to study the effects of corporate governance on the earnings and composition of the firm's workforce. Stronger corporate governance is measured using the passage of shareholder-sponsored proposals to declassify the board of directors. Following vote passage, employee earnings decrease by 12% on average, directionally consistent with previous research. However, this is driven by the changing composition of the workforce and there is no significant change in individual employee wages. This evidence suggests that stronger corporate governance leads to real changes in the types of employees selected and retained by the firm.

JEL Classification: G34, G30, J30

Suggested Citation

Liskovich, Inessa, Corporate Governance and the Firm's Workforce (April 15, 2016). Available at SSRN: https://ssrn.com/abstract=2765591 or http://dx.doi.org/10.2139/ssrn.2765591

Inessa Liskovich (Contact Author)

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States

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