Technological Fit and the Market for Managerial Talent

Journal of Financial and Quantitative Analysis (JFQA), Forthcoming

61 Pages Posted: 24 Jan 2020 Last revised: 10 Jan 2022

See all articles by Fred Bereskin

Fred Bereskin

University of Missouri

Seong K. Byun

Virginia Commonwealth University (VCU) - Department of Finance, Insurance & Real Estate

Jong-Min Oh

SungKyunKwan University (SKKU) - SKK Business School

Date Written: January 7, 2022

Abstract

We show that the similarity of a firm’s technological expertise with that of other firms affects managerial labor market outcomes. Using each firm’s patent portfolio to estimate its technological expertise, we find that its similarity in technological expertise with other firms is strongly related to the benchmark group used for CEO compensation and to job transitions. Furthermore, we show that a firm’s CEO pay is positively associated with the CEO compensation levels of technologically-similar firms. Our results thus demonstrate the crucial role of technological similarity in determining the value of outside options and the boundaries of the managerial labor market.

Suggested Citation

Bereskin, Frederick L. and Byun, Seong K. and Oh, Jong-Min, Technological Fit and the Market for Managerial Talent (January 7, 2022). Journal of Financial and Quantitative Analysis (JFQA), Forthcoming, Available at SSRN: https://ssrn.com/abstract=3512119 or http://dx.doi.org/10.2139/ssrn.3512119

Frederick L. Bereskin (Contact Author)

University of Missouri ( email )

Columbia, MO 65203
United States

Seong K. Byun

Virginia Commonwealth University (VCU) - Department of Finance, Insurance & Real Estate ( email )

Richmond, VA 23284
United States

Jong-Min Oh

SungKyunKwan University (SKKU) - SKK Business School ( email )

25-2, Sungkyunkwan-ro, Jongno-gu
Seoul, 03063
Korea, Republic of (South Korea)

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