| By: |
Belzil, Christian;
Bognanno, Michael;
Poinas, François |
| Abstract: |
This article estimates a dynamic reduced-form model of intra-firm promotions
using an employer-employee panel of over 300 of the largest corporations in
the U.S. in the period from 1981 to 1988. The estimation conditions on
unobserved individual heterogeneity and allows for both an endogenous initial
condition and sample attrition linked to individual heterogeneity in
demonstrating the relative importance of variables that influence promotion.
The role of the executive's functional area in promotion is considered along
with the existence and source of promotion fast tracks. We find that while the
principal determinant of promotions is unobserved individual heterogeneity,
functional area has a high explanatory power, resulting in promotion
probabilities that differ by functional area for executives at the same
reporting level and firm. No evidence is found that an executive's recent
speed of advancement in pay grade has a causal impact on in- sample promotions
after conditioning on the executive's career speed of advancement. For
high-level executives, fast tracks appear to result from heterogeneity in
persistent individual characteristics, not from an inherent benefit in recent
advancement itself. |
| Keywords: |
, promotion, fast track, functional area, dynamic discrete choice |
| JEL: |
C33 M5 M51 |
| Date: |
2012–10 |
| URL: |
http://d.repec.org/n?u=RePEc:tse:wpaper:26504&r=dcm |