Competition and Pay Inequality Within and Between Firms
利用加拿大-美国自由贸易协定，研究发现市场竞争加剧了企业间的薪酬不平等，但企业内部的不平等未显著增加，因为企业主通过差异化激励维持内部平等。
How does market competition affect pay inequality between and within firms? Using division managers as a pool of similar workers and the Canada–U.S. Free Trade Agreement, we find that greater competition increases overall pay inequality between, but not within, firms. This null effect within firms is not driven by a lack of statistical power. Instead, we find that it arises primarily within subsamples of firms with higher predicted levels of social comparison. Increased competition leads to greater pay-performance sensitivity among the higher-paid managers within firms, while it leads to greater overpayment among the other managers. These patterns are consistent with firm principals offering higher-powered incentives to their best managers and overpaying the rest. Altogether, this study suggests that, while competition leads to greater pay inequality overall, principals aim to maintain equality within firms and do so through the differential provision of incentives among employees. This paper was accepted by Bruno Cassiman, business strategy.