Hiring Costs, Open Source Signaling, and Buyer Power
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Beschreibung
The first part of this thesis (Chapters 1-3) consists of empirical studies about different aspects and implications of the costs that firms have to incur when they decide to hire new workers. The second part contains theoretical work on microeconomic theory (Chapter 4) and competition policy (Chapter 5).
In Chapter 1, we directly estimate the firm's costs to hire skilled workers based on detailed Swiss establishment-level data. Our results provide direct evidence in favor of increasing marginal hiring costs, implying that it becomes increasingly expensive for firms to hire a large number of skilled workers within a given time period.
Chapter 2 analyzes the effects of hiring costs for skilled workers on the firm's supply of training. Our empirical results provide evidence that the firm's supply of training depends on the firm's level of hiring costs. We find that firms facing high hiring costs decide to offer more training compared to firms with low hiring costs. As a conclusion, even if training itself is costly, firms may find it profitable to train workers in order to reduce hiring costs.
In Chapter 3, we use our data to test the implications of the generalized model of monopsony introduced by Manning (2006). Our empirical results are consistent with the predictions of this model. However, we point out that these results have to be interpreted with some caution, since the framework of the generalized model of monopsony is sensible to assumptions which could be inconsistent with data.
Chapter 4 considers open source software development as a possibility to provide a publicly observable signal about talent. We consider software developers who can either work on an open source project or on a closed source project. The former provides a publicly available signal about their talent, whereas the latter provides a signal only observed by their employer. We show that a talented employee may initially prefer a less paying job as an open source developer to commercial closed source projects, because a publicly available signal gives him a better bargaining position when renegotiating wages with his employer after the signal has been revealed. Our results concerning software developers naturally apply to other industries with high and low visibility jobs, e.g., academic rather than commercial research, consulting rather than management.
Chapter 5 studies buyer power. Buyer power can be defined as the ability of a buyer to influence the terms and conditions on which he purchases goods. Antitrust authorities have become increasingly concerned about buyer power. In particular, the rise of large buyers in retailing makes buyer power a key issue of current antitrust cases. We analyze the possible beneficial effect of buyer power in selecting the most efficient suppliers. In our framework, the positive effect of buyer power in selecting the most efficient suppliers does not outweigh the negative effect due to the decrease in the intensity of competition between downstream firms.
Autor*in
Marc Blatter
Themen in »Hiring Costs, Open Source Signaling, and Buyer Power«
Buyer Power Hiring Costs Signaling