The Endogeneity of Managerial Compensation in Firm Valuation: A Solution
指出以往研究错误地将管理层持股视为外生变量，并忽略期权等其他薪酬形式。通过工具变量和面板数据控制不可观测异质性，估计联立方程组，发现公司会内生地设定CEO薪酬以达到均衡。
Much of the empirical literature that has examined the functional relationship between firm value and managerial ownership levels assumes that managerial ownership levels are exogenous and are the only component of managerial compensation related to firm performance. This assumption is contrary to the theoretical and empirical literature wherein managerial compensation is endogenously determined and includes both shares and options. Using instruments for managerial compensation and panel data to control for unobservable heterogeneity in the firm's contracting environment, we estimate a system of simultaneous equations. We find that firms are in equilibrium when they endogenously set their chief executive officer's compensation.