AØKK08388U Seminar: Organizational Economics (F)
The course is a part of the financial line, signified by (F)
The seminar is primarily for students at the MSc of Economics.
A dominating part of economic activity is organized inside organizations rather than arms-length, through markets. In this course, we will look at different types of organizations, including both private firms and public sector organizations. At its core, organizational economics tries to understand how to organize economic activity within an organization in the absence of a price mechanism to coordinate transactions.
This Seminar presents some fundamental topics in organizational economics. We will study the provision of incentives, selection mechanisms, the choice of organizational structure (hierarchies, allocation of authority and decision-making), corporate governance and leadership inside firms.
We will have a strong focus on different types of firms and organization. We will in particular discuss family firms and ownermanaged firms but also analyze organization of production within the public sector.
Organizational Economics is a field characterized by a lot of theoretical contributions, but traditionally much less empirical work. In this course, we will introduce the basic conceptual frameworks and models related to the topics analyzed, but then focus on the empirical contributions in the different subject areas.
In additional to the learning outcome specified in the Master curriculum the student is after completing the seminar expected to be able to:
- Describe how variation in organizational structures have implication for firm outcome and how different organizational structures achieve different objectives of owners and managers.
- See similarities and spot differences in the structure of different organizations such as family firms, owner-managed firms, non-family firm and public sector institutions.
- Formulate a research question and suggest teoretical and empirical strategies for solving the question.
- Read research papers and extract key elements of such papers. This include being able to answer questions like:
- What is the central research question addressed in an article?
- To what extent does theory provide an answer to the proposed research question?
- What is the methodology and the data used to answer the proposed research question?
- What are the key results?
Exampels of litterature:
Topic 1 – Incentives, Incentive Systems and Relational Contracts
- Robert Gibbons and John Roberts (2012), “Economic Theories of Incentives in Organizations”, Roberts Gibbons and John Roberts (eds.), Chapter 2 in the Handbook of Organizational Economics. Princeton, NJ: Princeton University Press, pp 56-99.
- Oriana Bandiera, Iwan Barankay, and Imran Rasul (2005), “Social Preferences and the Response to Incentives: Evidence form Personnel Data”, Quarterly Journal of Economics, Vol. 120, N°3, August 2005 pp 917-962.
- Morten Bennedsen, Margarita Tsoutsoura and Daniel Wolfenzon (2018), “Drivers of Effort: Evidence of Employee Absence”, Journal of Financial Economics, forthcoming.
- Edward P. Lazear (2000), “Performance Pay and Productivity”, the American Economics Review, Vol. 9, N° 5, December 2000, pp 1346-1361.
- Rocco Macchiavello and Morjaria Ameet, “The Value of Relational Contracts: Evidence from a Supply Shock to Kenyan Rose Exports”, American Economic Review, 105 (9). pp. 2911-2945.
Topic 2: Corporate Culture
- John R. Graham, Jillian Grennan, Campbell R. Harvey and Shivaram Rajgopal (2016), “Corporate Culture: Evidence from the Field”, Duke I&E Research Paper No. 2016-33 Columbia Business School Research Paper No. 16-49.
- Luigi Guiso, Paola Sapienza and Luigi Zingales (2013), “The Value of Corporate Culture”, EIEF Working papers Series 1327, Einaudi Institute for Economics and Finance (EIEF), revised Oct 2013.
- Luigi Guiso, Paola Sapienza and Luigi Zingales (2006), “Does Culture Affect Economic Outcomes?”, Journal of Economic Perspectives, 20 (2): 23-48.
Topic 3: Do CEOs Matter?
- Morten Bennedsen, Francisco Perez Gonzales and Daniel Wolfenzon (2010), “Do CEOs matter? Evidence from Hospitalization Events”, Forthcoming Journal of Finance 2018.
- Marianne Bertrand and Antoinette Schoar (2003), “Managing with Style: The Effect of Managers on Firm Policies”, the Quartely Journal of Economics, Volume 118, Issue 4, 1 November 2003, Pages 1169–1208.
- C. Edward Fee, Chalres J. Hadlock and Joshua R. Pierce (2013), “Managers with and without Style: Evidence Using Exogenous Variation”, The Review of Financial Studies, Volume 26, Issue 3, 1 March 2013, Pages 567–601.
Topic 4: Leadership, CEOs and Compensation
- Steven N. Kaplan, Mark M. Klebanov and Morten Sorensen (2012), “Which CEO Characteristics and Abilities Matter?” Journal of Finance, June 2012, Vol.67, N° 3, pp 973-1007.
- Antoinette Schoar and Luo Zuo (2011), “Shaped by Booms and Busts: How the Economy Impacts CEO Careers and Management Style”, November 2011 NBER Working Paper.
- Marianne Bertrand and Sendhil Mullainathan, “Are CEOS Rewarded for Luck? The Ones Without Principals are” The Quarterly Journal of Economics, August 2001 116(3):901-932.
- Michael Jensen and Kevin K. Murphy (1998), “CEO Incentives: It's Not How Much You Pay, But How”, Harvard University Press, 1998; Harvard Business Review, No. 3, May-June 1990.
- Brian J. Hall and Jeffrey B. Liebman (1998) “Are CEOs Really Paid Like Bureaucrats?” The Quarterly Journal of Economics, Volume 113, Issue 3, 1 August 1998, Pages 653–691.
Topic 5: Management Practices
- Nicholas Bloom and John Van Reenen (2007), “Measuring and explaining management practices across firms and countries”, The Quarterly Journal of Economics, Volume 122, Issue 4, 1 November 2007, Pages 1351–1408.
- Nicholas Bloom and John Van Reenen (2010), “Why do management practices differ across firms and countries?” Journal of Economic Perspectives Vol. 24, no. 1, Winter 2010 pp. 203-24.
- Nicholas Bloom, Raffaella Sadun and John Van Reenen (2015), “Do private equity owned firms have better management practices?”, American Economic Review vol. 105, no. 5, May 2015 pp. 442-46.
- Oliviera Bandiera, Guiso, Andrea Pratt and Rafael Sadun, “What do CEOs do?” (2018), Journal of Political Economics, forthcoming.
Topic 6: Family Firms Part 1: Overview, Theory and importance
- Burkhart, Michael, Fausto Panunzi, and Andrei Shleifer (2003), “Family Firms”, Journal of Finance 58 (5): 2167-2201.
- Ronald C. Anderson and David M. Reeb (2003), “Founding-Family Ownership and Firm Performance: Evidence from the S&P 500”, the Journal of Finance, Vol. 58, No. 3 (June 2003), pp. 1301-1328.
- Morten Bennedsen, Francisco Pérez-Gonzales and Daniel Wolfenzon (2010), “The Governance of Family Firms”, in Corporate Governance: A Synthesis of Theory, Research and Practice, Baker, Kent H and Ronald Anderson, eds., John Wiley and Sons, Inc., 2010.
- Marianne Bertrand and Antoinette Schoar (2006), “The Role of Family in Family Firms”, Journal of economic perspectives Vol. 20 No. 2 Spring 2006.
Topic 7: Family Firms Part 2: Succession
- Francisco Perez Gonzales (2006), “Inherited Control and Firm Performance”, American Economic Review Vol. 96, No 04, 5 Dec 2006.
- Morten Bennedsen, Francisco Pérez-Gonzales and Daniel Wolfenzon (2007), “Inside the Family Firm: The Role of Families in the Succession Decision and Performance”, Quarterly Journals of Economics, Volume 122, Number 2, May 2007.
Topic 8: Family Firms Part 3: Employment and role of CEOs
- Andrew Ellul, Marco Pagano and Fabiano Schivardi (2018), “Employment and Wage Insurance within Firms: Worldwide Evidence”, Review of Financial Studies, Volume 31, Issue 4, 1 April 2018, Pages 1298–1340.
- Oriana Bandiera, Renata Lemos, Andrea Pratt and Raffaella Sadun (2018), “Managing the Family Firm: Evidence from CEOs at work”. The Review of Financial Studies, Volume 31, Issue 5, 1 May 2018, Pages 1605–1653
Topic 9: Public Sector Part 1: Theory
- James Andreoni (1990), “Altruism and Donation to Public Goods: A theory of Warm Gloving Giving”, The Economic Journal. Vol 100, No. 401 (June 1990), pp. 464-477.
- Roland Benabou and Jean Tirole (2003), “Intrinsic and Extrinsic Motivation”, The Review of Economic Studies, Volume 70, Issue 3, 1 July 2003, Pages 489–520.
- Timothy Besley and Maitreesh Ghatak (2018), “Prosocial Motivation and Incentives”, Annual Reviews of Economics 2018. 10:411–38
Topic 10: Public Sector Part 2: Empirics.
- Nicholas Bloom, Raffaella Sadun and John Van Reenen (2015), “Does management matter in healthcare?” LSE Working paper.
- Nicholas Bloom, Renata Lemos, Raffaella Sadun, John Van Reenen (2014), “Does Management Matter in Schools?” NBER Working Paper No. 20667.
- Caroline Hoxby (2000), “Does competition among schools benefit students and taxpayers”, The American Economic Review, Vol. 90, No. 5 (Dec 2000), pp. 1209-1238
- identify and clarify a problem,
- seek and select relevant literatur,
- write a academic paper,
- present and discuss own paper with the other students at the seminar.
The aim of the presentations is, that the student uses the presentation as an opportunity to practice oral skills and to receive feedback. The presentations is not a part of the exam and will not be assessed.
Mandatory activities in the seminar:
- Kick-off meeting
- Finding literatur and defining the project
- Writing process of the seminar paper
- Presentation of own project and paper
- Giving constructive feedback to another student´s paper
- Actively participating in discussions at the presentations and other meetings.
There is no weekly teaching/lecturing and the student cannot expect guidance from the teacher. If the teacher gives a few introduction lectures or gives the opportunity for guidance, this as well as other expectations are clarified at the kickoff meeting.
It is strongly recommended that you think about and search for a topic before the semester begins, as there is only a few weeks from the kick-off meeting to the submission of the project description/ agreement paper.
The seminar project paper must be uploaded in Absalon before the presentations, as the opponents and the other seminar participants have to read and comment on the paper. It is important that you upload a paper that is so finalized as possible due to the fact that the value of feedback and comments at the presentation is strongly associated with the skill level of the seminar paper.
After the presentations, you can with a few corrections improve the seminar paper by including the feedback and comments emerged during the presentations. It is NOT intended that you rewrite or begin the writing of the full project AFTER the presentation has taken place.
• Kick-off meeting: 4 September 2020 10.15-13.00
• Deadline commitmentpaper: not later than September 24th at noon
• Workshop (feedback and comments on commitment paper): September 25 10.00-12.00
• Deadline of pre-paper uploaded to Absalon: one week before presentations
• Presentations workshops: Saturday November 21th 9.00-16.00
Office hours: Fridays September 11th, October 9th and 30th, 9.00-11.00
All information regarding the seminar is communicated through Absalon including venue. So it is very important that you by yourself logon to Absalon and read the information already when you are registered at the seminar.
- Project work
Each student receives individually oral feedback on the paper and at the presentation from peers and supervisor.
The supervisor gives the students collective oral feedback and individual guidance.
- 7,5 ECTS
- Type of assessment
- Written examinationA seminar paper in English that meets the formal requirements for written papers stated in the curriculum of the Master programme and at KUNet for seminars.
- Exam registration requirements
- All aids allowed
for the seminar paper.
The teacher defines the aids that must be used for the presentations.
- Marking scale
- 7-point grading scale
- Censorship form
- External censorship
- Exam period
Deadline for submitting the final seminar paper: December 1, 2020 before 10 AM
The seminar paper must be uploaded to the Digital Exam portal. More information will be available from the middle of the semester.
The reexam is a written seminar paper as stated in the Curriculum.
Criteria for exam assesment
Students are assessed on the extent to which they master the learning outcome for the seminar and can make use of the knowledge, skills and competencies listed in the learning outcomes in the Curriculum of the Master programme.
To receive the top grade, the student must with no or only a few minor weaknesses be able to demonstrate an excellent performance displaying a high level of command of all aspects of the relevant material.