Globalization and Executive Compensation

74 Pages Posted: 8 May 2017 Last revised: 19 Feb 2018

See all articles by Wolfgang Keller

Wolfgang Keller

University of Colorado; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Will Olney

Williams College

Multiple version iconThere are 3 versions of this paper

Date Written: May 2017


Employing comprehensive data on top executives at major U.S. companies, we show that their compensation is increasing with exports, as well as firm size and technology. Exogenous export shocks unrelated to managerial decisions also increase executive compensation, and there is little evidence that this is due to increasing returns to talent. We do find that export shocks primarily affect discretionary forms of compensation of more powerful executives at firms with poor corporate governance, as one would expect if globalization has enhanced rent-capture opportunities. Overall, globalization has been more important for the rapid growth of executive compensation and U.S. inequality than previously thought, with rent-capture playing a role.

Keywords: corporate governance, Distributional Effects, Executive compensation, Globalization, inequality

JEL Classification: F14, F16, F66, J31, M12

Suggested Citation

Keller, Wolfgang and Olney, Will, Globalization and Executive Compensation (May 2017). CEPR Discussion Paper No. DP12026, Available at SSRN:

Wolfgang Keller (Contact Author)

University of Colorado ( email )

Department of Economics
PO Box 256
Boulder, CO 80309
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

United Kingdom

Will Olney

Williams College ( email )

Williamstown, MA 01267
United States

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