Incentives in a (Czech?) Bank
by Bogaard and Svejnar
HRM effects in services
• Ann Bartel 2004 ILLR (100 citations in GS)
Branches of a Canadian bank, branch
manager decides on HRM (incentives,
participation, skills), 2 periods, controls for
manager quality using employee survey:
sales annual % change= f(K, L, HRM,
branch_age, MgrTenure, MarketX, FE_year,
FE_branch, FE_mgr )
• Ichniowski&Shaw: insider econometrics: is
the goal to measure adoption effect in a
randomly chosen branch or early adopters?
Literature
• Evidence on HPWP: makes productivity go
up as well as wages and job satisfaction,
profits don't change much, more likely to be
adopted when skilled labor is abundant.
• Strategies: unit FE, time varying IV using
industry adoption of HPWP from another
country, matching.
Bogaard and Svejnar
This is not HPWP, but basic specialization.
(+) Nice new data, alternative empirical
strategies (IV, matching), lots of robustness
checks, model to aid interpretation. 56 pages
(and I’ll ask for 10 more). Wow.
(-) Whole lotta IVing going on, head swimming.
Stress on foreign/domestic in CEE in 2003-07?
Magnitude of IV estimates huge (2x s.d.?).
Experiment
Region and size explain adoption.
Bankers and advisors a different treatment.
Need more info on the design (var in X):
• Was this a surprise? Not much pre- data.
• Who chose order of implementation? (within
size or regional groups) In particular, early
adoption (in t=1) as pilot in best branches,
low hanging fruit within & across branches?
IV strategy
• IV idea: Regional/size adoption. Sequencing?
• Then add size to both first and second stage?
• IV is not similar to matching: IV is an acrossgroup comparison (averaging unobs. within
groups) zooming in on late adopters (LATE),
whilst matching compares within groups.
• Show missing 500 obs., first stage F tests,
pscore estimation, common support,
balancing tests, dif-in-difs w/ matching
implementation (within group pscore?) etc.
Minor Questions
• Free riding or lower returns to late adopters?
• Care about side payments?
• Take out advisors in small branches in 2006?
• Can do better on local demand? Un. rates?
• No info on new footing (flow)?
• Study effect on wages?
• Must look at bad loans over time.