The theory of incomplete contracts has been used to study the relationship between buyers and suppliers following the deployment of modern information technology to facilitate coordination between them. Previous research has sought to explain anecdotal evidence from some industries on the recent...

This study focuses on the relation between current compensation and past performance measures as signals of a CEO’s ability. We develop a simple two-period principal-agent model with moral hazard and adverse selection and test theoretical predictions using CEO compensation data from 1993-2006....

We examine the relation between R&D intensity and the weights on ability indicators and financial performance measures in CEO compensation. The CEO’s technology-related ability is likely more important in R&D intensive firms. Therefore, we predict that these firms place higher weights on...

A translog function is specified to represent the relation between revenue and human resource inputs in public accounting firms. Estimation of the model using a balanced panel of annual data for 64 large CPA firms for the period 1995-1999 indicates that increasing returns to scale prevail in the...

Supervisory monitoring and monetary incentives are often used concurrently to mitigate agency conflicts. When an agent has to exert different types of effort for multi-dimensional tasks, little evidence exists on the interaction effect on an agent’s performance when both control mechanisms are...

This paper examines how public firms’ organizational constraints affect the sensitivity of labor outsourcing to demand uncertainty. We focus on a single industry in which state-owned firms are subject to additional organizational constraints that private firms are not. We mitigate omitted...