The Effect of Competition on Executive Compensation and Incentives
利用葡萄牙简化企业注册的改革作为准自然实验，研究发现产品市场竞争加剧提高了高管总薪酬，但降低了薪酬对业绩的敏感度，同时增加了业绩导致的CEO更替和企业退出概率。
This paper studies the effect of increased product market competition on executive compensation and incentives. We use a reform that simplified firm entry regulation in Portugal as a quasi-natural experiment, and exploit its staggered implementation across municipalities for identification. Using employer-employee data, we find that increased competition following the reform raised total pay but reduced the sensitivity of pay to firm performance. This is consistent with theoretical results showing that a fall in entry costs weakens managerial incentive provision. Entry deregulation also increased performance-induced CEO turnover and firms’ probability of exit, suggesting that competition provides direct incentives for managerial effort.