Product Market Competition and Returns to Talent

25 Pages Posted: 11 Jul 2013

See all articles by Jen Baggs

Jen Baggs

Queen's School of Business

Jean-Etienne de Bettignies

Queen's University - Smith School of Business

John C. Ries

University of British Columbia (UBC) - Sauder School of Business; University of British Columbia (UBC) - SFU-UBC Centre for the Study of Government and Business

Date Written: Fall 2013

Abstract

This paper investigates how product market competition influences the wages paid to workers and the distribution of talent across industries. We develop a model where firms facing different competitive conditions bid for workers. The model predicts that wages are increasing in talent, decreasing in competition, and the interaction between talent and competition is positive. In addition, the most talented workers will be concentrated in competitive industries and talent dispersion rises with competition. We use linked employee–employer data to test these predictions.

Suggested Citation

Baggs, Jennifer and de Bettignies, Jean-Etienne and Ries, John C., Product Market Competition and Returns to Talent (Fall 2013). Journal of Economics & Management Strategy, Vol. 22, Issue 3, pp. 569-593, 2013, Available at SSRN: https://ssrn.com/abstract=2292327 or http://dx.doi.org/10.1111/jems.12020

Jennifer Baggs (Contact Author)

Queen's School of Business ( email )

Smith School of Business - Queen's University
143 Union Street
Kingston, Ontario K7L 3N6
Canada

Jean-Etienne De Bettignies

Queen's University - Smith School of Business ( email )

Smith School of Business - Queen's University
143 Union Street
Kingston, Ontario K7L 3N6
Canada

John C. Ries

University of British Columbia (UBC) - Sauder School of Business ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada

University of British Columbia (UBC) - SFU-UBC Centre for the Study of Government and Business ( email )

2053 Main Mall
Vancouver, British Columbia V6T 1Z2
Canada
604-822-8493 (Phone)
604-822-8477 (Fax)

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