Competition for managers and product market efficiency

Fátima Barros, Inés Macho-Stadler

Research output: Contribution to journalArticleResearchpeer-review

17 Citations (Scopus)

Abstract

We investigate whether competition between two firms to hire managers with different abilities might affect efficiency in the product market, when a manager's effort is his/her private information. We conclude that competition for managers might lead to an improvement in efficiency in the market of the firm that attracts the most efficient manager. Competition for managers might even eliminate the productive efficiency loss due to the asymmetry of information in the firm-manager relationship.
Original languageEnglish
Pages (from-to)89-103
JournalJournal of Economics and Management Strategy
Volume7
Issue number1
DOIs
Publication statusPublished - 1 Jan 1998

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