Michael BURDA* - INSEADflora.insead.edu/fichiersti_wp/Inseadwp1991/91-63.pdf · Mincer-style earnings equations differ across characteristics and these are correlated with industry,

"SOME NEW INSIGHTS ON THEINTERINDUSTRY WAGE STRUCTURE FROM THE

GERMAN SOCIO ECONOMIC PANEL"

by

Michael BURDA*

N° 91/63/EP

* Associate Professor of Economics, INSEAD, Boulevard de Constance,Fontainebleau 77305 Cedex, France.

Printed at INSEAD,Fontainebleau, France

Some New Insights on the Interindustry Wage Structurefrom the German Socioeconomic Panel

Michael C. Burda*

July 1991

bieau France, and the Centre for Economic• INSEAD, F-77305 FontainePolicy Research. I amWirtschaftsforschung andgenerous hospitality, and

grateful to the Deutsches Institut furthe Wissenschaftszentrum Berlin forto Michael Funke, Johannes Schwarze,

David Soskice and Gert Wagner for dis;ussions and comments. RainerPischner's assistance with the German Socioeconomic Panel data setwas especially invaluable. This project was supported by INSEAD'sResearch Department and grants from the Alfred P. Sloan and FordFoundations.

Abstract

This paper investigates the interindustry wage structure in the1985 wave of the German Socioeconomic Panel. In addition to theusual controls, this survey contains detailed information on jobcharacteristics and work conditions. Interaction of industryaffiliation is significant with several individual attributes,especially job tenure; homogeneity of earnings equations acrossthese attributes is decisively rejected. The industry wagestructure is insignificant for workers with low job tenure. Theseresults are consistent with the interpretation of interindustrywage differentials as shared rents from industry or firm-specifichuman capital.

1. Introduction

This paper investigates the interindustry wage structure in

the 1985 wave of the German Socioeconomic Panel (Deutsches

Soziookonomisches Panel, hereafter SOEP), a representative

cross-section of West German households. In addition to the usual

controls, the 1985 survey contains several questions about

workplace characteristics and worker qualifications. With

responses to these questions it is possible to control for an

extended set of factors in "Mincer equations" relating earnings to

human capital and other individual characteristics. Inclusion of

such controls can explain between 8-107. of wage variation beyond

that explained in similar recent studies.

Besides improving control for influences of workplace

conditions and worker qualifications on pay, this paper

investigates the stability of the interindustry wage structure

across different groupings in the sample. To the extent that

Mincer-style earnings equations differ across characteristics and

these are correlated with industry, the estimated interindustry

wage structure may merely reflects omitted variable bias. It is

well-recognized that estimated coefficients are biased to the

extent that excluded regressors are correlated with included ones.

We pursue this issue one step further: could omitted,

industry-specific inte-actions explain some part of the estimated

interindustry wage structure?

Industry wage differentials in the SOEP are significantly

estimated in the full sample, but show some differences with those

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estimated by Krueger and Summers (1988) in the US Current

Population Survey. We also find that earnings functions are

statistically different across sex, firm size, full versus

part-time, and especially job tenure groupings. Tests for

homogeneity of earnings equations across these groups are

decisively rejected. When the sample is reduced to full-time

workers with less than five years experience in their current job,

industry wage differentials vanish, whereas they remain

economically and statistically significant for workers with more

than five years tenure. These results, which analyze only a

fraction of all potential interactions, militate against

overinterpretation of industry wage differentials. They are more

consistent with workers and firms' sharing rents of industry or

firm-specific human capital, which accumulates only over time.

The paper is organized as follows. Section 2 reviews the

literature on the interindustry wage structure and its

interpretation. Section 3 elaborates one particular omitted

variables interpretation of the interindustry wage structure.

Section 4 describes the SOEP and its 1985 wave which includes

detailed information on job characteristics and worker attitudes,

and presents estimates the interindustry wage structure. Section 5

explores the robustness of wage structures across different

groupings of the working population. Section 6 offers an

interpretation of the results.

2. The Interindustry Wage Structure and its Interpretation:A Survey of the Literature

The fact that observationally similar workers with comparable

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skills and experience earn different wages in different industries

has puzzled economists for a long time.' In the postwar period,

labor economists around the world began to take particular notice

of the durability of this wage structure. 2 Lebergott (1947) showed

not only wages that wages were highly correlated across industries

in the US, Canada, the United Kingdom and Sweden, but also the

Soviet Union. These findings were later corroborated by Dunlop and

Rothbaum (1955) in international comparisons, and more recently by

Katz and Summers (1988).

The suspicion that the wage structure merely reflected

distribution of observable skills was dispelled by the pioneering

work of Krueger and Summers (1988), who employed survey data on

individual workers to identify and track the interindustry wage

structure, estimated as coefficients on industry affiliation dummy

variables in standard Mincer earnings equations. By projecting the

wage structure on a variety of measurable individual

characteristics including human capital proxies, they find a large

component of variance remains "explained" by industry affiliation.

The interindustry wage structure lends itself to several

1See Murphy and Topel (1987) for a particularly evocative

reference to the phenomenon by Adam Smith; for an early attempt at

a neoclassical justification, see John Bates Clark (1899). Thaler

(1988) provides a useful summary of recent explanations of the

interindustry wage structure.

2See Dunlop (1944), Lebergott (1947), Slichter (1950) and Cullen

(1956) for the United States; Turner (1952) and Buddy?nd Tolles

(1957) for the United Kingdom; Reynolds and Taft (1956) for

France; and Grumbach and Konig (1957) and Lampert (1968) for

Germany.

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economic interpretations. J.T. Dunlop (1944) and Sumner Slichter

(1950) linked wages to ability to pay, that is, the profitability

of the enterprise in question. Slichter (1950) wrote that "wages,

within a considerable range, reflect managerial discretion, that

where management can easily pay high wages they tend to do so, and

that where managements are barely breaking even, they tend to keep

wages down," p.88. This "ability to pay" view has been revived by

recent work of Blanchflower and Oswald (1989) and Nickell and

Wadhwani (1988). Alternatively, interindustry wage differences

could derive from job characteristics (compensating differentials)

or sorting on unobservable individual attributes. The first idea

thus explains why the mining industry in this view pays higher

wages than average, ceteris paribus, because miners work in dark

places underground, while forestry workers earn less because they

are outdoors. The second central idea says that the chemical

industry pays more than the textile industry because certain

unobservable characteristics are more valuable in that industry

and are remunerated in equilibrium by higher wages.

More recently, Katz (1986), Krueger and Summers (1988), and

Katz and Summers (1988) have attributed industry pay differences

to the broad heading of "efficiency wage considerations." In this

-view managers set pay in order to solve an optimizing problem.

Higher wages reduce job turnover (Pencavel 1972), spur worker

effort by increasing the cost of job loss (Shapiro and Stiglitz

1984), increase loyalt y and productivity (Akerlof 1984), and

improve the quality of job applicants (Weiss 1980). To these can

be added the "fair wage hypothesis" of Akerlof and Yellen (1990),

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which stresses perceptions of fairness among workers. In addition,

Lindbeck and Snower's (1986) work can be interpreted as a type of

efficiency wage payment to prevent workers from disrupting the

production process.

Clearly, efficiency wages is not a single theory but rather a

mosaic of ideas, some of which are more neoclassical than others.

They share the common theme that firms set wages, and may find it

against their profit maximizing interests to reduce them in the

face of unemployment. To the extent that industries differ in the

optimal efficiency wage that firms pay, an interindustry wage

structure will arise.

3. Omitted Variable Bias and the Industry Wage Structure

The mere existence of significant coefficients on industry

dummy variables is not conclusive evidence of efficiency wages.

Estimated industry dummies may simply be a by-product of

unobserved differences in worker quality as well as other

characteristics which are correlated with particular industries.

Cross-section and panel data sets can only obtain a limited amount

of information about worker attributes. This can be seen in the

large amount of variance in earnings that remains unexplained by

measured variables such as age, experience, education, and other

identifiable attributes. 3

If verifiable characteristics unobservable to econometricians

are more valuable to industry x than to others, and if workers

3Katz and Summers (1°S°1 concede that some of this unexplainable

variance is correlated with the effect of controls on the

uncorrected interindustm age structure, suggesting that some of

the former may be indeed ..:nmeasurable quality.

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possessing these attributes were indifferent between working in

industry x and elsewhere, firms should offer higher wages to these

workers to attract them from other industries. In equilibrium one

would observe a premium for working in industry x as long as the

characteristics in question were not included as a right had side

variable. While Blackburn and Newmark (1988) show that

intelligence --as measured by IQ-- is not positively associated

with high wage industries, this does not rule out other forms of

unobservable heterogeneity, including such unquantifiable traits

as loyalty, perseverance, and carefulness, all of which are likely

to be important to an employer. To the extent that these

unobserved attributes are valued differently by different

industries, they will surface in estimated industry dummy

coefficients. 4

The point is more general than this. Suppose that each

employment relationship consists of a "match" of a worker and a

firm. Each firm operates in one of k=1,...,K industries, each of

which with a revenue function R K(x , y , t) where x is a list ofI J

worker attributes, y is a list of firm attributes, and t is the

time the match has existed. Few restrictions are imposed on the

derivatives of R except that aRK/at is positive for all K; that

4Following Griliches (1957) and Theil (1957), If the analyst

estimates the model y=X0+u where the true specification Is

y=X13-1-Zy+u, the OLS estimate of 33 is given by b = (X'X) l X'y = P +

(X' X) 1 X' (Zz+u), so Eb= 13 + P7, where P-a(X' X) -1X' Z is the matrix

of "auxiliary regression- coefficients of left-out variables Z on

the columns of X. The OLS estimator Is biased as long as the

elements of Z are correlated with the j columns of X, and the biasof the ith element b. is equal to Z cov( X. ,Z .

1 j 1 J j

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is, there is an element of firm specific human capital in the

production process. Workers have their own fallback or reservation

wage w • , which may be determined by outside offers or the level of

unemployment benefits. If the jth firm and ith worker set the wage

according to a simple Nash bargaining rule, we have

(1) w = ERK(X ,y ,t) + w*1/2

To the extent that R's differ across industries, so in principle

could the derivatives of R with respect to their arguments and

thus the estimated earnings function as well.

There are many reasons to believe that R might be different

across industries. It is hard to understand, a priori, why the

individual return to an additional year of schooling in the

chemical industry is equal to that in the personal services

sector. Moreover there may be interactions here, so that the

effect of characteristics may depend on other other variables,

such as tenure t.

The common response to this line of reasoning is that labor

should reallocate itself until these differences are eliminated

at the margin, as would be the case if labor mobility is perfect

across industries and R is characterized by decreasing return on

all margins. Yet there are many potential reasons why, even under

conditions of mobility, that industry dummies may be estimated

with significant coefficients where there is in fact no "industry

effect," but simply a misspecified wage equation.

One is the desirability of the particular industry to

particular workers. Women, because of an exogenously given option

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of childbearing, may prefer industries in which long cumulative

tenure or experience is unnecessary and work career interruptions

are possible. An increased willingness of women to be in this

group leads to lower bargained wages for them, vis-a-vis men. This

will lead to an "industry sex effect". To the extent that women

are actually concentrated in those industries, leaving out an

interaction term for women in a wage equation with industry

dummies will induce biased estimates of any industry effect.

Simply controlling for sex will not solve this problem.5

A second reason is discrimination. Suppose that certain

industries discriminate against women. For example the

construction industry is well-recognized as a male-dominated

industry. Suppose further, in contrast, that other industries do

not discriminate. If underpaid women are also underrepresented in

the construction industry, then a construction dummy in the

absence of a construction industry-sex interaction will be

estimated with with a wage premium.

A third reason is rent sharing. 6 Suppose that a certain match

modelled in equation (1) has existed for a long time, and that

aRK/at is positive. It may simply be the case that the firm does

not want to replace i s worker with some other; there is simply

5A similar example sir s es in the case of residents of foreign

nationality. Foreigners generally don't speak the language as well

as natives. These Individuals may prefer industries where

on-the-job communicate: n is less important, and be willing to

accept lower pay, I other things equal. For given employer's

preferences, a Nash 16 erg aMing outcome will lead to a lower wage

for foreigners in particular industry. Thus an "industry

effect" may be dete:-.e where it is really an nationality-industry

interaction, and outcome of a voluntary matching

process.

6This is stressed by Kat s• Summers (1989).

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too much value in the existing employment relationship. Thus

neither of the two parties are willing to allow third parties to

underbid, at least for some range of wages. To the extent that

different industries value this firm or industry specific capital

differently, aRK/at will vary across industries because there is

no arbitrage opportunity across this margin, and industry

dummey variables will simply pick up this effect in a misspecified

wage equation.

It is at least possible that the industry wage structure is

simply a series of omitted interactions with sex, race, and other

variables. To see this, consider the simple case in which the

unconditional industry wage effect is in fact zero, but each

industry i rewards binary attribute j, j=1...J differently by 71.1.

The expected value of the coefficient of an industry dummy i in an

otherwise correctly specified equation is approximately

Eb = E (fraction of individuals in industry i with attribute DT„i j Ii

This ''wastebasket effect" should be distinguished from that

suggested by Murphy and Topel (1987a,b), who stress voluntary

sorting by workers into industries on the basis of unobserved

ability and this sorting is highly correlated with that observed

for measurable skills. Curiously, this possibility has not been

raised in the heated debate over the industry wage structure.

4. The Interindustry Wage Structure of the SOEP

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The German Socioeconomic Panel (SOEP) is a representative

annual survey of roughly 6000 households in the Federal Republic

of Germany, involving more than 10,000 individuals. The SOEP

offers a unique alternative to already extensively investigated US

data sets. The design of the SOEP is similar to the Panel Survey

of Income Dynamics (PSID) and the Survey of Income and Program

Partipation (SIPP) and as second mover to these panel studies has

improved on some aspects of the former, for example, by

interviewing all working individuals in a household. 7 Second, a

variety of information has been gathered about quality of the

workplace and workplace attitudes. In 1985 these included a set of

thirteen questions regarding the quality of the workplace and

worker attitudes. Furthermore the respondent was allowed to

distinguish between "somewhat agree" and "fully agree" to the

extent these characteristics were applicable. The attributes are

listed in Table 1.

Several of these questions in Table 1 are obvious proxies for

attributes described in the literature on earnings determination.

For example, the compensating differentials literature would

predict positive signs for questions 2, 6, 7, 12, and 13 and

possibly negative signs for 1, 3, 9, and 11. Question 5 is

directly related to one interpretation of the efficiency wage

hypothesis; workers who are supervised more should receive lower

wages, whereas the unsupervised will receive supra-normal wages to

deter shirking.

7For an excellent survey of the comparability of the SOEP and the

US Survey of Income and Program Participation (SIP?), see Witte(1990).

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There were 4599 individuals in the 1985 SOEP survey who

responded that they were working and reported their gross income

with complete data for all controls. Of these, 3422 were German

citizens and 1177 were foreigners. Of the grand total, 4030 were

working full time and of these, 2866 were of German nationality.8

Using these data, OLS regressions of log hourly gross earnings on

one-digit industry dummy variables were employed to obtain raw

estimates of the interindustry wage structure for all employed

individuals in the SOEP for hourly wages (gross of deductions and

withholding). The results are reported in the first column of

Table 2. Similar unreported results were obtained throughout this

paper for hourly compensation, which included employer bonuses,

but still excluded employee contributions to social insurance. The

control group was the no response group.

Following Krueger and Summers (1988), a Mincer wage equation

was estimated that included the following controls: education and

its square, age, experience, occupation dummies (10), regional

dummies (8), a sex dummy, a central city dummy, a unionization

dummy, an ever married dummy, interactions of sex with

ever-married, education, education squared, and a constant.

Because education variables cannot be compared, foreign citizens

are excluded. These results are presented in the second column of

8The distinction is important because key variables such as

schooling are not comparable across German nationals and residentsof foreign nationality.9Krueger and Summers actually controlled for education and its

square, 6 age dummies. 8 occupation dummies, 3 regional dummies, asex dummy, a central city dummy, a unionization dummy, an evermarried dummy, veteran status, interactions of sex with marriage,education squared, am: six wage brackets, and a constant (seeTable 1, p. 264).

9

Table 2.

Direct control for human capital and workplace conditions can

be enhanced in the SOEP as a result of several questions in the

1985 survey described above. The third column of Table 2 presents

estimates of the wage structure after adding to the

Krueger-Summers controls tenure on the current job,

experience-squared, training/qualification dummies (6), guild

membership, job characteristics (26), and dummies for

self-employed and civil servant status.

The last column of Table 2 displays the estimated industry

wage structure given a set of "preferred controls," which simply

drop from the extended controls the following interactions:

sex-marriage, sex-education, sex-education-squared, and sex-

experience. An F-test of the joint significance of estimated

coefficients on the industry dummy variables confirms the

existence of the interindustry wage structure. On the other hand,

the weighted standard deviation of the estimated coefficients

falls considerably. Furthermore the percentage of variance

explained by the equation rises by 8-107 vis-a-vis the KS

controls, suggesting that job quality can explain more variance in

the wage structure than otherwise thought.'°

The results in general confirm the hypothesis that the

interindustry wage structure in Germany is tighter than in the

United States, controlling for the same factors. These estimates

10Edln and Zettenberg (1989) recently Investigated the

interindustry wage structure using Swedish data with a detailed

set of controls and reached similar conclusions.

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are compared in Table 3. As in Krueger and Summers (1988), we find

that in unreported results on "near 2-digit classifications,"

durables goods manufacturing and chemicals are high wage

industries, whereas the trade sectors pay statistically

significant lower wages." On the other hand the personal services

sector in Germany and wholesale-retail trade seem to have changed

places, ie the former paying considerably better than the latter.

5. Testing for homogeneity in the earning equations

The possibility of heterogeneous earnings functions suggested

in Section 3 can be tested. 12 Two approaches are taken. First, a

Chow test of subsample stability can be performed. Significant

variability across estimated earnings functions, as detected by a

statistically significant F-statistic, would signal a potential

"wastebasket" function performed by industry dummies. Tests for

homogeneity of the wage equation were performed across the

following subgroupings: male versus female; full-time versus

part-time; small versus large firms; and fewer than 5 years versus

more than 5 years tenure at current job. The results are reported

in Table 4. The test results allow the rejection at very low

significance levels of the null that the wage equations are the

same across the two groups. These results can only serve as a

warning against potential interactions.

11For aggregate evidence on West German industry wage differentials

see Fels and Gundlach (199::

12Krueger and Summer s (1988) do not test for equality of

coefficients across subgrours in their tables.

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Despite the suggestive examples of the previous section,

there is no compelling reason to believe that these interactions

are correlated with industry grouping. 13 It is possible, of course,

to test directly for interaction effects for the groupings

analyzed above. Table 5 presents F-tests for exclusion

restrictions for interactions of industry with sex,

full-time/part-time, firm size, and job tenure (more or less than

5 year affiliation with present f irm ). For sex, tenure, and full

time/part time, the interaction effect is significant at the

0.0001 level. It is also noteworthy that for full-time male

employees of large firms with low current job tenure, the joint

statistical significance of the industry dummies is attenuated

significantly.

In general It seems that the industry wage structure is less

robust the finer the division applied to the data. This is

consistent with "wastebasket" interpretation of the industry

dummies. At the same time, the job quality variables remain

consistently significant. Results to this effect presented in

Table 6, especially with respect to tenure, suggest that the wage

structure might be fruitfully estimated on a narrower sample. In

Table 7 we present the interindustry wage structure for low (less

than 60 months) and high (more than 60 months) job tenure for

all employees. The confirms the suspicion that significant

interaction exists between industry and tenure in the wage

13Unfortunately there were insufficient observations to perform Chow

tests for each industry grouping.

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equation. While the interindustry wage structure is robust for

workers of long tenure, it is statistically insignificant for

workers with little experience within their current firm.

That interindustry wage differentials are exhibited only for

employees with extended tenure in a given enterprise, if robust

for other data sets in other countries, has important implications

for the interindustry wage structure. It seems to favor

interpretations stressing sharing of rents from industry or firm

specific human capital formation, both of which will be correlated

with tenure. 14 For example, it is reasonable that in-house

experience is more valuable in chemical and metal industries than

in trade or personal services, and as result apparently identical

workers in different industries are not the same. 15 If such human

capital has different productivity in different industries, then

it will pay for high productivity industries to attempt to bid for

this resource. As a state variable, job tenure cannot be simply

purchased, but rather created in a time intensive process. Here

the job turnover interpretation of the interindustry wage

structure is closest to our point here: to increase firm or

14It should be remarked that the continuous variable tenure

variable was invariably significant in the regression results,

corroborating findings el of LOwenbein (1989), Hubler and Gerlach

(1990) and Schwarze (1990).15

Slichter (1950) wrote: '..jobs and occupations which bear the

same name do note necessarily involve the same kinds of duties orthe same degree of responsibility. Machinists first-class in acandy factory do not necessarily need the same knowledge of the

trade as machinists first-class in an oil refinery. Loom fixers

may have essentially same duties in different mills, but the

skill required of them may vary greatly depending upon the kind

and quality of goods which ;he mill produces." (p.801

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industry specific human capital, firms invest by paying higher

wages and reducing the rate of attrition through quits into other

jobs. The key difference is that turnover reduction is a

determinant, rather than a byproduct of the process by which wages

are set.

The average tenure of workers in various industries in the

1985 SOEP is shown in Table 8. Chi-squared tables for distribution

of tenure (uncompleted spells) are also displayed in Table 9.

Both reveal striking differences across both one and two digit

industries. Clearly other things matter as well such as industry

history and changes in hiring policies over time. While some

industries indeed seem to possess workers of higher than average

tenure while others need less tenure, the pattern of tenure

concentration is less pronounced at the one-sector industry level.

On this interpretation, it need not be the case that high

wage industries necessarily have higher tenure profiles. When

tenure is created it will be impossible for the firm not to share

the rents with the worker, since such workers cannot be replaced

overnight. As a result the very indispensibility of workers will

contribute to the cost of tenure (firm specific human capital). It

is not implausible that firms in these industries move up their

demand curve for this "input." Thus, following the interpretation

of Katz and Summers (1989), this form of rent sharing shows up as

the interindustry wage structure.

This interpretation is consistent with other aspects of the

industry wage structure. Krueger and Summers (1988) found that

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involuntary industry changers in the CPS Displaced Workers Survey

sustained wage changes equivalent to those estimated in their

equations. This is consistent with the wage differential as the

rent from firm or industry-specific human capital formation; by

definition, firm-specific capital disappears when the worker

leaves the firm, and industry-specific capital is destroyed when a

worker exits the industry. 16 On the other hand, the specific human

capital explanation requires an extreme complementarity in the

production function. Secretaries in the textile or wood/paper/pulp

industries would require less firm or industry-specific training

than say in the chemical industry. Yet, there is no compelling

reason why this degree of complementarity should be constant

across industries. The results suggest that this avenue of

explaining the occupational wage structure should be explored, as

a possible alternative to the "fairness" or sociological

explanations popular in the literature.17

6. Concluding Remarks

As measured by the coefficients on industry dummy variables,

The SOEP data set exhibits a similar interindustry wage structure

as found in the US, albeit with tighter variance. 18 The addition of

16Our results are nct consistent with involuntary changers into

high wage industries receiving immediately higher wages. This

could be the case if workers received a wage that exceeeded the

opportunity cost of their labor in industries with high

productivity of firm-s: ecif ic human capital. Our suggest that

workers must first accumulate the necessary experience before

receiving tenure-related rents.

17See Akerlof (1982) and Al.::: ..?f and Yellen (1990).

18This confirms the aggregate ifindings of Burda and Sachs (1988).

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better controls for job quality, however, reduce significantly

this variability within margins estimation error. The results of

this investigation suggest that there are statistically

significant differences in wage equations across groupings, and

that industry interactions with- these groups are significant. This

raises the prospect that the industry wage structure is merely a

wastebasket for omitted interaction effects of various groupings

with industry.

Although we do not stress the result here, one version of

the efficiency wage hypothesis finds support in our results.

Estimated coefficients on "strict job supervision: fully agree"

(question 5 in Table 1) were always statistically significant and

negative in the regressions reported in this paper, ranging from

9-157. of the gross wage. On the other hand, by controlling for

this factor directly --based on individual's response to the

questioner rather than matching job attributes from other data

sets-- we reduce its plausibility as a the sole explanation of the

interindustry wage structure. The results, especially those with

respect to job tenure, are supportive of a shared-rent

interpretation of interindustry wage differentials, with rents

deriving from industry or firm-specific human capital which

accumulates only over time. The robustness of these rents over

time and space can be explained by that with which this human

capital is employed.

Perhaps the most durable conclusion of" the paper is that

simple earnings equations, which are reduced forms anyway, may not

be capably of capturing the rich economic processes that underly

wage determination. There is simply not enough information in

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existing surveys. The sensitivity of the earnings equation to the

sample with which it is estimated should serve as a warning

against overinterpretation of industry wage differentials.

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Table 1Job Quality Questions in the 1985 SOEP

1. Does your work involve variation in tasks?2. Is your work physically strenuous?3. Can you organize your work independently?4. Does your work vary with demand?5. Does your work involve strict supervision?6. Do you have to work variable shifts?7. Are you required to work nights regularly?8. Do you often have conflicts with your supervisors?9. Do you get along well with your colleagues on the job?10. Are you involved in decision making about the promotion andsalaries of others?11. Are you able to acquire skills on the job that will help youadvance in the future?12. Does your work involve usually bothersome or environmentallyhazardous conditions?13. Does your job involve a high degree of mental concentrationor nervous tension?

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Table 2. The SOEP Interindustry Wage Structure (1-digit)

(standard errors in parentheses)

NO K-S EXTENDED PREFERREDIndustry CONTROLS CONTROLS CONTROLS CONTROLS

Agriculture -0.29 -0.19 -0.14 -0.17(0.09) (0.11) (0.11) (0.11)

Mining 0.413 0.253 0.112 0.099(0.15) (0.16) (0.15) (0.15)

Manufacturing 0.121 0.068 0.028 0.023(0.03) (0.03) (0.03) 0.03

Construction 0.088 0.022 0.035 0.028(0.05) (0.04) (0.04) (0.04)

Wholesale/Retail Trade -0.20 -0.12 -0.12 -0.14(0.04) (0.04) (0.04) (0.04)

Transport/Communication 0.104 -0.02 -0.07 -0.07(0.05) (0.04) (0.04) (0.04)

Finance/Insurance 0.242 0.115 0.101 0.086(0.06) (0.05) (0.05) (0.05)

Other Services 0.114 0.000 -0.01 -0.01(0.04) (0.03) (0.03) (0.03)

Unweighted std dev 0.211 0.130 0.091 0.093Adjustedt 0.198 0.102 0.051 0.054Weighted std dev 0.113 0.065 0.056 0.058Adjustedt 0.086 0.051 0.039 0.043F-test for industry

dummies16.33* 5.057* 4.155* 4.345*

R-squared 0.027 0.399 0.489 0.475Sample size 4598 3342 3342 3342

Dependent variable: log of hourly earnings excl. fringesReference Group: unclassified

tAdjusted for estimation error*F-statistic significant at the 0.0001 level

K-S controls: after Krueger and Summers (1988): education

square, age, experience, occupation dummies (10), regional

(8), sex dummy, central city dummy, unionization

and its

dummies

dummy,

ever married dummy, interactions of sex

education, education squared, and a constant

264). Extended controls: K-S controls plus

squared, training dummies (6), guild

characteristics (26), self-employed

dummy,

Preferred controls: extended controls except

with ever-married,

(see Table 1, p.

tenure, experience

membership, job

civil servant.

the interactions

sex-marriage, sex-education, sex-education-squared, and sex-

experience.

-21-

Table 3. SOEP and CPS Interindustry Wage Structures Compared(1-digit)

Industry

SOEPK-S PREFERREDCONTROLS CONTROLS

CPSKRUEGER-SUMMERSt

Agriculture -0.19 -0.17(0.11) (0.11)

Mining 0.253 0.099 0.222(0.16) (0.15) (0.75)

Manufacturing 0.068 0.023 0.091(0.03) 0.03 0.03

Construction 0.022 0.028 0.108(0.04) (0.04) (0.03)

Wholesale/Retail Trade -0.12 -0.14 -0.11(0.04) (0.04) (0.03)

Transport/Communication -0.02 -0.07 0.145(0.04) (0.04) (0.03)

Finance/Insurance 0.115 0.086 0.055(0.05) (0.05) (0.03)

Other Services 0.000 -0.01 -0.078(0.03) (0.03) (0.03)

Weighted std dev 0.065 0.058 n.r.Adjusted 0.051 0.043 0.094F-test for industry 5.057* 4.345• n.r.

dummies (p<.000001)

R-squared 0.399 0.475 n.r.Sample size 3342 3342 3342

tlndustry wage equation differentials estimated by Krueger and

Summers (1988) in the May 1984 US Current Population Survey.

Classifications not exactly comparable across countries.

-22-

Table 4F-tests for Homogeneity of Slope Coefficients in Wage Equations

Grouping SSR

uF:chow(72,3198)

Men v Women 613.8 7.938Full-time v Part-time 593.7 9.683Firmsize>20 v <20 employees 692.8 2.033Tenure?.-60months v <60 months 658.0 4.457

Total SSR restricted (pooled sample): 724.9758

Hourly wages, employed Germans, n=3342

-23-

Table 5. F-tests for Industry Interactions

Hourly wages, preferred controls, German citizens, full sample n=3342

All employeesIndustry interacted with: F-statistic (8,3239) (MB009)

Constant (Industry dummy) 8.0956 (p<.0001)Sex 4.0408 (p<.0001)Full-time 8.4793 (p<.0001)Firmsize>20 2.8051 (p=.0067)Tenure>60 4.8507 (p<.0001)

All full time employeesIndustry interacted with:

(MB010)F-statistic (8,2771)

Constant (Industry dummy) 4.1039 (p<.0001)Sex 3.6503 (p=.0003)Firmsize>20 3.0873 (p=.0032)Tenure>60 4.8365 (p<.0001)

Male full-time employeesIndustry interacted with: F-statistic (8,1911)

Constant (Industry dummy) 3.9971 (p<.0001)Firmsize>20 2.1431 (p=.0363)Tenure>60 4.1991 (p<.0001)

Male full-time employees, FIRMSIZE>20Industry interacted with: F-statistic (8,1518)

Constant (Industry dummy) 3.7626 (p=.0002)Tenure>60 4.1429 (p<.0001)

Male full-time employees, FIRMSIZE>20, TENURE<60and with less than 60 months job tenureIndustry interacted with: F-statistic (8,396)

Constant (Industry dummy) 2.2715 (p=.0220)

(MB11)

(MB12)

(MB014)

-24-

Table 6. F-tests for Industry and Job Quality DummyVariables on Different Subsamples

Hourly wages, preferred controls, German citizens

Sample

All employees n=3342, no interactions

F-statistic

Industry dummies F(8,3269)=4.3449 (p<.0001)Job Quality dummies F(26,3269)=5.7977 (p<.0001)

All employees n=3342, with interactions*Industry dummies F(8,3239)=8.0956 (p<.0001)Job Quality dummies F(26,3239)=5.7173 (p<.0001)

All full-time employees, with interactions•Industry dummies F(8,2771)=4.1039 (p<.0001)Job Quality dummies F(26,2771)=7.1844 (p<.0001)

Male full-time employees, with interactions•Industry dummies F(8,1911)=3.9971 (p<.0001)Job Quality dummies F(26,1911)=5.2794 (p<.0001)

Male full-time employees, FIRMSIZE>20, with interactions*Industry dummies F(8,1518)=3.7626 (p=.0002)Job Quality dummies F(26,1518)=4.0130 (p<.0001)

Male full-time employees, FIRMSIZE>20, TENURE<60Industry dummies F(8,396)=2.2715 (p=.0220)Job Quality dummies F(26,396)=3.0437 (p<.0001)

All full-time male employees, TENURE<60Industry dummies F(8,578)=2.0564 (p=.0382)Job Quality dummies F(26,578)=4.0496 (p<.0001)

All male employees, TENURE<60Industry dummies F(8,617)=0.9611 (p=.4655)Job Quality dummies F(26,617)=3.228 (p<.0001)

All employees, TENURE<60Industry dummies F(8,1193)=1.1558 (p=.3229)Job Quality dummies F(26,1193)=3.9861 (p<.0001)

Controls are the same as in previous tables.

*When admissible: industry x sex, industry x fulltime, industry xfirmsize>20, firm tenure<60.

-25-

Table 7.SOEP Interindustry Wage Structure By Employment Tenure,

1-Digit industries, preferred Controls, all German employees(standard errors in parentheses)

IndustryTenure

<60 months >60 months

Agriculture -0.18 -0.09(0.18) (0.13)

Mining 0.390 0.034(0.38) (0.15)

Manufacturing -0.01 0.060(0.06) (0.04)

Construction 0.051 0.065(0.07) (0.05)

Wholesale/Retail Trade -0.12 -0.15(0.07) (0.05)

Transport/Communication -0.07 -0.01(0.09) (0.05)

Finance/Insurance -0.02 0.146(0.09) (0.06)

Other Services -0.06 0.026(0.06) (0.04)

Unweighted std err 0.164 0.090Adjusted* 0.024 0.037Weighted std err 0.054 0.071Adjusted* n.c. 0.055F-test for industry

dummies 1.18 4.730p=0.3076 p<.0001

R-squared 0.485 0.445Sample size 1279 2062

-26-

Table 8. Mean Tenure (incomplete spells)by Industry (months)

Sector (number of individuals) 19Mean"2-digit"

-1 Unclassified (205) 128.40 Insufficient info (32) 18.81 Agriculture/Forestry (36) 159.8

Std(Mean)

7.25.7

26.92 Fishing (2) 59.5 51.53 Energy and Water (34) 156.4 24.74 Mining (10) 176.5 43.95 Chemicals (95) 144.1 12.16 Plastics (34) 134.1 20.07 Stone Clay and Glass (38) 170.1 21.98 Primary Metals (188) 136.3 8.59 Machine tools (213) 141.3 8.810 Machinery, elec/prec (153) 112.8 8.611 Wood, paper, printing (93) 114.3 11.312 Apparel (83) 138.4 14.013 Food, Drink and Tobacco (111) 112.7 9.814 Construction: HAUPT (150) 119.3 9.015 Construction: HILFS (80) 109.5 13.316 Wholesale Trade (85) 98.8 11.117 Brokering (4) 105.5 32.518 Retail Trade (240) 94.7 6.019 Federal Railroad (44) 252.7 18.920 Federal Post (67) 194.0 15.721 Other comm and transport (77) 113.9 12.022 Banking (89) 124.9 10.123 Insurance (44) 118.9 16.224 Eating and drinking (56) 91.8 14.325 Personal Services (21) 54.7 17.526 Building maintenence, garb (15) 113.5 32.427 Education (246) 125.7 6.328 Medical services (164) 100.8 8.429 Legal professions (81) 78.9 9.330 Other services (9) 67.4 27.831 Churches, clubs (102) 79.9 7.232 Private Household (7) 61.4 23.533 Government/Admin (338) 149.3 6.134 Social Insurance (44) 150.6 19.736 incorrect answers (55) 112.8 13.7

Average Tenure, n=3422 123.7

19 Industry 35 "other nonclassified branch" contained one

observation who had worked at the company for 324 months.

-27-

CHISQ: p=42.819 0.0000.2190.1240.0021.3650.7380.4491.3091.2592.4521.4310.3561.0430.1480.2946.206

0.6400.7240.9680.2430.3900.5030.2530.2620.1170.2320.5510.3070.7010.5880.013

Table 9. ChiSquare 2X2 Contingency Tests,Concentration of Tenured Workers by industry

1-digit:

TENURE60 BY AGR

1251 16

2054 22 CHISQ: 0.289 (P=.591)TENURE60 BY MIN

1265 2

2068 8 CHISQ; 0.243 (p=.243)TENURE60 BY MAN

905 362

1430 646 CHISQ; 2.422 (p=.120)TENURE60 BY CON

1166 101

1947 129 CHISQ; 3.794 (p=.051)TENURE60 BY WRT

1118 149

1896 180 CHISQ; 8.464 (p=.004)TENURE60 BY TPU

1208 59

1913 163 CHISQ; 12.955 (p<.001)TENURE60 BY FIR

1220 47

1990 86 CHISQ; 0.386 (p=.532)TENURE60 BY SER

854 413

1409 667 CHISQ; 0.079 (p=.779)

"2-digit"

TENURE60 BY:0 Insufficient info1 Agriculture/Forestry2 Fishing3 Energy and Water4 Mining5 Chemicals6 Plastics7 Stone Clay and Glass8 Primary Metals9 Machine tools10 Machinery, elec and prec11 Wood, paper, and printing12 Apparel13 Food, Drink and Tobacco14 Construction: HAUPT15 Construction: HILFS

-28-

Table 9. ChiSquare 2X2 Contingency Tests,Concentration of Tenured Workers by industry

(continued)

16 Wholesale Trade 3.108 0.07817 Brokering 0.283 0.59518 Retail Trade 5.538 0.01919 Federal Railroad 13.34 0.00020 Federal Post 11.608 0.00121 Other comm and transp 0.002 0.96522 Banking 1.611 0.20423 Insurance 0.528 0.46724 Eating and drinking 7.375 0.00725 Personal Services 20.528 0.00026 Building maintenence, garb 3.127 0.07727 Education 3.777 0.05228 Medical services 7.73 0.00529 Legal professions 6.865 0.00930 Other services 3.173 0.07531 Churches, clubs 4.595 0.03232 Private Household 3.35 0.06733 Government/Admin 28.477 0.00034 Social Insurance 1.314 0.25236 incorrect answers 0.002 0.965

-29-

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-32-

88/12 Spyros MAKRIDAKIS "Business firms and managers in the 21stcentury", February 1988

88/13 Manfred KETS DE VRIES "Alexithymia in organizational life: theorganization man revisited", February 1988.

88/14 Alain NOEL "The interpretation of strategies: a study ofthe impact of CEOs on thecorporation", March 1988.

S8/15 Anil DEOLALIKAR and "The production of and returns fromLars-Hendrik ROLLER industrial innovation: an econometric

analysis for a developing country", December1987.

88/16 Gabriel HAWAWINI "Market efficiency and equity pricing:international evidence and implications forglobal investing", March 1988.

88/17 Michael BURDA "Monopolistic competition, costs ofadjustment and the behavior of Europeanemployment", September 1987.

88/18 Michael BURDA "Reflections on "Wait Unemployment" inEurope", November 1987, revised February1988.

88/19 M.J. LAWRENCE and "Individual bias in judgements ofSpyros MAKRIDAKIS confidence", March 1988.

88/20 Jean DERMINE,Damien NEVEN and

"Portfolio selection by mutual funds, anequilibrium model", March 1988.

J.F. THISSE

88/21 James TEBOUL "De-industrialize service for quality", March1988 (88/03 Revised).

88/22 Lars-Hendrik ROLLER "Proper Quadratic Functions with anApplication to AT&T", May 1987 (RevisedMarch 1988).

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Michael LAWRENCE and

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88/03 James TEBOUL "De-industrialize service for quality", January1988.

88/04 Susan SCHNEIDER "National vs. corporate culture: implicationsfor human resource management". January1988.

88/05 Charles WYPLOSZ "The swinging dollar: is Europe out of

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88/06 Reinhard ANGELMAR "I,es minks dans les canaux de

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Bernard SINCLAIR- "Price formation and product design throughDESGAGNE

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88/10 Bernard SINCLAIR- "The robustness of some standard auction

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Everette S. GARDNER

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Sjur Didrik FLAM

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Catherine C. ECKEL

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88/36 Vikas TIBREWALA and "A Predictive Test of the NBD Model thatBruce BUCHANAN Controls for Non-stationarity", June 1988.

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RR/40 Josef LAKONISHOK and "Anomalous price behavior aroundTheo VERMAELEN repurchase tender offers", August 1988.

88/41 Charles WYPLOSZ "Assymetry in the EMS: intentional orsystemic?", August 1988.

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88/46 Yves DOZ and "From intent to outcome: a processAmy SHUEN framework for paknerships", August 1988.

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"The interpersonal structure of decisionmaking: a social comparison approach toorganizational choice", November 1988.

"Is mismatch really the problem? Someestimates of the Chelwood Gate II modelwith US data", September 1988.

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"Technology, work, and the organization:the impact of expert systems", July 1988.

"Cognition and organizational analysis:who's minding the store?", September 1988.

"Whatever happened to the philosopher-king: the leader's addiction to power,September 1988.

"Strategic choice of flexible productiontechnologies and welfare implications",October 1988

"Method of moments tests of contingentclaims asset pricing modeh", October 1988.

"Size-sorted portfolios and the violation ofthe random walk hypothesis: Additionalempirical evidence and implication for testsof asset pricing models", June 1988.

"Data transferability: estimating the responseeffect of future events based on historicalanalogy", October 1988.

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"Regulation, taxes and the market forcorporate control in Belgium", September

1988.

"Strategic pricing of differentiated consumerdurables in • dynamic duopoly: a numericalanalysis", October 1988.

"Charting strategic roles for internationalfactories", December 1988

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"A discussion of exact measures ofinformation assymetry: the example of Myersand Mailer model or the importance of theasset structure of the firm", December 1988.

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"The impact of language theories on DSSdialog", January 1989.

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89/03 Beth H. JONES and

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Wilfried VANHONACKER

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performance: hr search of a new theory",

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"Shared history or shared culture? The

effects of time, culture, and performance oninstitutionalization in simulatedorganizations", January 1989.

"Coordinating manufacturing and businessstrategies: I", February 1989.

"Struchwal adjustment in European retailbanking. Some view from industrialorganisation", January 1989.

"Trends in the development of technologyand their effects on the production structurein the European Community", January 1989.

"Brand proliferation and entry deterrence",February 1989.

"A market based approach to the valuationof the assets in place and the growthopportunities of the firm", December 1988.

"Understanding the leader-strategy interface:application of the strategic relationshipinterview method", February 1989.

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Manfred KETS DE VRIES

and Sydney PERZOW

/19/23 Robert KORAJCZYK and

Claude VIALLET

89/24 Martin KILDUFF and

Mitchel ABOLAFIA

"The impostor syndrome: a disquietingphenomenon in organizational life", February

1989.

"Product innovation: a tool for competitiveadvantage", March 1989.

"Evaluating a firm's product innovationperformance", March 1989.

"Combining related and sparse data in linearregression models", February 1989.

"Changement organisationnel et r6alitesculturelles: coutrastes franco-amtricains",March 1989.

"Information asymmetry, market failure andjoint-ventures: theory and evidence",March 1989.

"Combining related and sparse data in linearregression models", Revised March 1989.

"A rational random behavior model ofchoke", Revised March 1989.

"Influence of manufacturing improvementprogrammes on performance", April 1989.

"What is the role of character inpsychoanalysis?" April 1989.

"Equity risk prenaia and the pricing offoreign exchange risk" April 1989.

"The social destruction of reality:Organisational conflict as social drama"zApril 1989.

89/25 Roger BETANCOURT andDavid GAUTSCHI

89/26 Charles BEAN,Edmond MALINVAUD,Peter BERNHOLZ,Francesco GIAVAllIand Charles WYPLOSZ

89/27 David KRACKHARDT andMartin KILDUFF

89/28 Martin KILDUFF

89/29 Robert GOGEL andJean-Claude LARRECHE

89/30 Lars-Hendrik ROLLERand Mihkel M.TOMBAK

89/31 Michael C. BURDA andStefan GERLACH

89/32 Peter HAUG andTawfik JELASSI

89/33 Bernard SINCLAIR-DESGAGNE

89/34 Sumantra GHOSHAL andNittin NOHRIA

89/35 Jean DERMINE andPierre HILLION

"Two essential characteristics of retailmarkets and their economic consequences"March 1989.

"Macroeconomic policies for 1992: thetransition and after". April 1989.

"Friendship patterns and culturalattributions: the control of organizationaldiversity", April 1989.

"The interpersonal structure of decisionmaking: a social comparison approach toorganizational choice", Revised April 1989.

"The battlefield for 1992: product strengthand geographic coverage", May 1989.

"Competition and Investment in FlexibleTechnologies", May 1989.

"Intertemporal prices and the US tradebalance in durable goods", July 1989.

"Application and evaluation of a multi-criteria decision support system for thedynamic selection of U.S. manufacturinglocations', May 1989.

"Design flexibility in monopsonicticindustries", May 1989.

"Requisite variety versus shared values:managing corporate-division relationships inthe M-Form organisation", May 1989.

"Deposit rate ceilings and the market valueof banks: The case of France 1971-1981",May 1989.

89/36 Martin KILDUFF

89/37 Manfred KETS DE VRIES

89/38 Manfred KETS DE VRIES

89/39 Robert KORAJCZYK andClaude VIALLET

89/40 Balaji CHAKRAVARTHY

89/41 B. SINCLAIR-DESGAGNEand Nathalie DIERKENS

89/42 Robert ANSON andTawfik JELASSI

89/43 Michael BURDA

89/44 Balaji CHAKRAVARTHYand Peter LORANGE

89/45 Rob WEITZ and

Arnoud DE MEYER

89/46 Marcel CORSTJENS,Carmen MATUTES andDamien NEVEN

89/47 Manfred KETS DE VRIESand Christine MEAD

89/48 Damien NEVEN andLars-Hendrik ROLLER

"A dispositional approach to social networks:the case of organizational choice", May 1989.

"The organisational fool: balancing aleader's hubris", May 1989.

"The CFA blues", June 1989.

"An empirical investigation of internationalsuet pricing", (Revised June 1989).

"Management systems for innovation andproductivity", June 1989.

"The strategic supply of precisions", June1989.

"A development framework for computer-supported conflict resolution", July 1989.

"A note on firing costs and severance benefit,in equilibrium unemployment", June 1989.

"Strategic adaptation in multi-businessfirms", June 1989.

"Managing expert systems: a framework andease study", June 1989.

"Entry Encouragement", July 1989.

"The global dimension in leadership andorganization: issues and controversies", April1989.

"European integration and trade flows",August 1989.

89/49 Jean DERMINE "Home country control and mutual

recognition", July 1989. 89/62 Amoud DE MEYER

(TM)

89/50 Jean DERMINE "The specialization of financial institutions,

the EEC model", August 1989. 89/63 Enver YUCESAN and

(TM) Lee SCHRUBEN

89/51 Spyros MAKRIDAKIS "Sliding simulation: a new approach to time

series forecasting". July 1989. 89/64 Enver YUCESAN and

(TM) Lee SCHRUBEN

89/52 Arnoud DE MEYER "Shortening development cycle times: a

manufacturer's perspective", August 1989. 89/65 Soumitra DUTTA and

89/53 Spyms MAKRIDAKIS "Why combining works?", July 1989.

(TM,

AC, FIN)

Piero BONISSONE

89/54 S. BALAKRISHNAN "Organisation costs and a theory of joint 89/66 B. SINCLAIR-DESGAGNE

and Mitchell KOZA ventures", September 1989. (TM,EP)

89/55 H. SCHUTTE "Euro-Japanese cooperation in information 89/67 Peter BOSSAERTS and

technology", September 1989. (FIN) Pierre HILLION

89/56 Wilfried VANHONACKER

and Lydia PRICE

"On the practical usefulness of meta-analysis

results", September 1989.

1990

89/57 Taekwnn KIM,

Lars-Hendrik ROLLER

and Mihkel TOMBAK

"Market growth and the diffusion of

multiproduct technologies", September 1989. 90/01

TM/EP/AC

B. SINCLAIR-DESGAGNE

89/58 Lars-Hendrik ROLLER "Strategic aspects of flexible production 90/02 Michael BURDA

(EP,TM) and Mihkel TOMBAK technologies", October 1989. EP

89/59

(OR)

Manfred KETS DE VRIES,

Daphne ZEVADI,

Alain NOEL and

"Locus of control and entrepreneurship: a

three-country comparative study", October

1989.

90/03

TM

Amoud DE MEYER

Mihkel TOMBAK

89/60 Enver YUCESAN and "Simulation graphs for design and analysis of 90/04 Gabriel HAWAWINI and

(TM) Lee SCHRUBEN discrete event simulation models", October FIN/EP Eric RAJENDRA

1989.

89/61 Susan SCHNEIDER and "Interpreting and responding to strategic 90/05 Gabriel HAWAWINI and

(All) Arnoud DE MEYER issues: The impact of national culture",

October 1989.

FIN/EP Bertrand JACQUILLAT

"Technology strategy and international R&D

operations", October 1989.

"Equivalence of simulations: A graph

approach", November 1989.

"Complexity of simulation models: A graph

theoretic approach", November 1989.

"MARS: A mergers and acquisitions

reasoning system", November 1989.

"On the regulation of procurement bids",

November 1989.

"Market microstructure effects ofgovennnent intervention in the foreign

exchange market", December 1989.

"Unavoidable Mechanisms", January 1990.

"Monopolistic Competition, Costs ofAdjustment, and the Behaviour of European

Manufacturing Employment", January 1990.

"Management of Communication in

International Research and Development",

January 1990.

"The Transformation of the European

Financial Services Industry: From

Fragmentation to Integration", January 1990.

"European Equity Markets: Toward 1992

and Beyond", January 1990.

90/06 Gabriel HAWAWINI and "Integration of European Equity Markets:FIN/EP Eric RAJENDRA Implications of Structural Change for Key

Market Participants to and Beyond 1992",January 1990.

90/17

FIN

Nathalie DIERKENS Information Asymmetry and Equity Issues",Revised January 1990.

90/18 Wilfried VANHONACKER "Managerial Decision Rules and the90/07 Gabriel HAWAWINI "Stock Market Anomalies and the Pricing of MKT Estimation of Dynamic Sales ResponseFIN/EP Equity on the Tokyo Stock Exchange",

January 1990.

Models", Revised January 1990.

90/19 Beth JONES and "The Effect of Computer Intervention and90/08

TM/EP

Tawfik JELASSI and

B. SINCLAIR-DESGAGNE

"Modelling with MCDSS: What aboutEthics?", January 1990.

TM Tawfik JELASSI Task Structure on Bargaining Outcome",February 1990.

90/09 Alberto GIOVANNINI "Capital Controls and Internal' a Trade 90/20 Tawfik JELASSI, "An Introduction to Group Decision andEP/FIN and Jae WON PARK Finance", January 1990. TM Gregory KERSTEN and Negotiation Support", February 1990.

Stanley ZIONTS

90/10 Joyce BRYER and "The Impact of Language Theories on DSSTM Tawfik JELASSI Dialog", January 1990. 90/21 Roy SMITH and "Reconfiguration of the Global Securities

FIN Ingo WALTER Industry in the 1990's", February 1990.

90/11 Enver YUCESAN "An Overview of Frequency DomainTM Methodology for Simulation Sensitivity 90/22 Ingo WALTER "European Financial Integration and Its

Analysis", January 1990. FIN Implications for the United States", February

1990.

90/12 Michael BURDA "Structural Change, Unemployment Benefitsand Iligh Unemployment: A U.S.-European 90/23 Damien NEVEN "EEC Integration towards 1992: SomeComparison", January 1990. EP/SM Distributional Aspects", Revised December

1989

90/13 Soumitra DUTTA and "Approximate Reasoning about TemporalTM Shashi SHEKHAR Constraints in Real Time Planning and 90/24 Lars Tyge NIELSEN "Positive Prices in CAPM", January 1990.

Search", January 1990. FIN/EP

90/14

TM

Albert ANGEHRN and

Hans-Jakob LOTH!

"Visual Interactive Modelling and IntelligentDSS: Putting Theory Into Practice", January

90/25FIN/EP

Lars Tyge NIELSEN "Existence of Equilibrium in CAPM",January 1990.

1990.

90/26 Charles KADUSHIN and "Why networking Fails: Double Binds and90/15

TM

Arnoud DE MEYER,

Dirk DESCHOOLMEESTER,

Rudy MOENAERT and

"The Internal Technological Renewal of aBusiness Unit with a Mature Technology",January 1990.

011/BP Michael BRIMM the Limitations of Shadow Networks",February 1990.

Jan BARBE 90/27 Abbas FOROUGHI and "NSS Solutions to Major NegotiationTM Tawfik JELASSI Stumbling Blocks", February 1990.

90/16 Richard LEVICH and "Tax-Driven Regulatory Drag: EuropeanFIN Ingo WALTER Financial Centers in the 1990's", January 90/28 Arnoud DE MEYER "The Manufacturing Contribution to

1990. TM Innovation", February 1990.

90/40 Manfred KETS DE VRIES "Leaden on the Couch: The case of Roberto90/29 Nathalie DIERKENS "A Discussion of Correct Measures of OR Cal vi", April 1990.FIN/AC Information Asymmetry", January 1990.

90/30 Lars Tyge NIELSEN "The Expected Utility of Portfolios of90/41FIN/EP

Gabriel HAWAWINI,Itzhak SWARY and

"Capital Market Reaction to theAnnouncement of Interstate Banking

FIN/EP Assets", March 1990. lk HWAN JANG Legislation", March 1990.

90/31 David GAUTSCHI and "What Determines U.S. Retail Margins?", 90/42 Joel STECKEL and "Cross-Validating Regression Models inMKT/EP Roger BETANCOURT February 1990. MKT Wilfried VANHONACKER Marketing Research", (Revised April 1990).

90/32 Srinivasan BALAK- "Information Asymmetry, Adverse Selection 90/43 Robert KORAJCZYK and "Equity Risk Premia and the Pricing ofSM RISHNAN and

Mitchell KOZAand Joint-Ventures: Theory and Evidence",Revised, January 1990.

Claude VIALLET Foreign Exchange Risk", May 1990.

90/33 Caren SIEHL, "The Role of Rites of Integration in Service 90/44 Gilles AMADO, "Organisational Change and CulturalOR David BOWEN and Delivery", March 1990. OR Claude FAUCHEUX and Realities: Franco-American Contrasts", April

Christine PEARSON Andre LAURENT 1990.

90/45 Soumitra DUTTA and "Integrating Case Based and Rule Based90/34FIN/EP

Jean DERMINE "The Gains from European RankingIntegration, a Can for a Pro-Active

TM Piero BONISSONE Reasoning: The Possibilistic Connection",May 1990.

Competition Policy", April 1990.90/46 Spyros MAKRIDAKIS "Exponential Smoothing: The Effect of

90/35 Jae Won PARK "Changing Uncertainty and the Time- TM and Michele HIBON Initial Values and Less Functions on Post-Varying Risk Pretnia in the Term Structureof Nominal Interest Rates", December 19118,Revised March 1990. 90/47 Lydia PRICE and

Sample Forecasting Accuracy".

"Improper Sampling in NaturalMKT Wilfried VANHONACKER Experiments: Limitations on the Use of

90/36 Arnoud DE MEYER "An Empirical Investigation of Meta-Analysis Results in BayesianTM Manufacturing Strategies in European Updating", Revised May 1990.

Industry", April 1990.90/48 Jae WON PARK "The Information in the Term Structure of

90/37TM/OR/SM

William CATS-BARIL "Executive Information Systems: Developingan Approach to Open the Potsibles", April

EP Interest Rates: Out-of-Sample ForecastingPerformance", June 1990.

1990.90/49 Soumitra DUTTA "Approximate Reasoning by Analogy to

90/38 Wilfried VANHONACKER "Managerial Decision Behaviour and the TM Answer Null Queries", June 1990.MKT Estimation of Dynamic Sales Response

Models", (Revised February 1990). 90/50 Daniel COHEN and "Price and Trade Effects of Exchange RatesEP Charles WYPLOSZ Fluctuations and die Design of Policy

90/39TM

Louis LE BLANC andTawlik JELASSI

"An Evaluation and Selection Methodologyfor Expert System Shells", May 1990.

Coordination", April 1990.

90/51 Michael BURDA and "Gross Labour Market Flows in Europe: 90/63 Sumantra GHOSHAL and "Organising Competitor Analysis Systems",EP Charles WYPLOSZ Some Stylized Facts", June 1990. SM Eleanor WESTNEY August 1990

90/52 Lars Tyge NIELSEN "The Utility of Infinite Menus", June 1990. 90/64 Sumantra GHOSHAL "Internal Differentiation and CorporateFIN SM Performance: Case of the Multinational

Corporation", August 199090/53 Michael Burda "The Consequences of German EconomicEP and Monetary Union", June 1990. 90/65 Charles WYPLOSZ "A Note on the Real Exchange Rate Effect of

EP German Unification", August 199090/54 Damien NEVEN and "European Financial Regulation: A

EP Colin MEYER Framework for Policy Analysis", (Revised 90/66 Soumitra DUTTA and "Computer Support for Strategic and TacticalMay 1990). TIM/SE/FIN Piero BONISSONE Planning in Mergers and Acquisitions",

September 199090/55 Michael BURDA and "Intertemporal Prices and the US Trade

El' Stefan GERLACH Balance", (Revised July 1990). 90/67 Soumitra DUTTA and "Integrating Prior Cases and Expert Knowledge In

90/56 Damien NEVEN and "The Structure and Determinants ants of East-West

TM/SE/FIN Piero BONISSONE • Mergers and Acquisitions Reasoning System",

September 1990EP Lars-Hendrik ROLLER Trade: A Preliminary Analysis of the

Manufacturing Sector", July 1990 90/68 Soumitra DUTTA "A Framework ind Methodology for Enhancing theTM/SE Business Impact of Artificial Intelligence

90/57 Lars Tyge NIELSEN Common Knowledge of a Multivariate Aggregate Applications", September 1990FIN/EP/ Statistic", July 1990

TM 90/69 Soumitra DUTTA "A Model for Temporal Reasoning in MedicalTM Expert Systems", September 1990

90/58 Lars Type NIELSEN "Common Knowledge of Price and Expected CostFIN/EP/TM in an Oligopolistic Market", August 1990 90/70

TM

Albert ANGEHRN "'Triple C': A Visual Interactive MCDSS",

September 199090/59 Jean DERMINE and "Economies of Scale and

FIN Lars-Hendrik ROLLER Scope in the French Mutual Funds (SICAV) 90/71 Philip PARKER end "Competitive Effects in Diffusion Models: AnIndustry", August 1990 MKT Hubert GATIGNON Empirical Analysis", September 1990

90/60 Pen 1Z and "An Interactive Group Decision Aid for 90172 Enver YUCESAN "Analysis of Marko, Chains Using SimulationTM Tawfik JELASSI Multiohjective Problems: An Empirical TM Graph Models", October 1990

Assessment", September 1990

90/61

TM

Pankaj CHANDRA and

Mihkel TOMBAK"Models for the Evlauation of Manufacturing

flexibility", August 1990

90/73

TM

Arnoud DE MEYER and

Kasra FERDOWS

"Removing the Barriers in Manufacturing",

October 1990

90/62 Damien NEVEN and "Public Policy Towards TV Broadcasting in the 90/74 Sumantra GHOSHAL and "Requisite Complexity: Organising Headquarters-EP Menno VAN DUK Netherlands", August 1990 SM Nitin NOHRIA Subsidiary Relations in MNCs", October 1990

90/75MKT

Roger BETANCOURT andDavid GAUTSCHI

Me Outputs of Retail Activities: Concepts,Measuremest and Evidence', October 1990

90/37FIN/EP

Lan Tyge NIELSEN 'Existence of Equilibrium in CAPM: FurtherResults', December 1990

90/76 WiIfried VANHONACKER •Masegerial Decision Behaviour and the Estimation 90/113 Susan C. SCHNEIDER and 'audios in Organisational Analysis: Who'sMKT of Dynamic Sales Response Models',

Revised October 1990On/MKT Reinhard ANGELMAR Minding the Store?* Revised. December 1990

90/89 Manfred F.R. KETS DE VRIES Ms CEO Who Coati'. Talk Straight and Other90/77 Warned VANHONACKER "Takes the Kuck Scheme of Sales Response la 011 Tale feu lhe Board Room,* December 1990MKT Advernsisg: An Auregatios-Independest

Ardocorrelano. Test", October 1990 90/90 Philip PARKER *Peke Elasticity Dynamics ever the AdoptionMKT Likcyde: An Empirical Study,* December 1990

90/73 Michael BURDA and "Eschew Rate Dynamics and CurrencyEr

90/79

Stefan GERLACH

Anil GABA

Unification: The Ostmark - DM Rote',October 1990

misferesces with as Unknown Noise Level in aTM Bernoulli Process", October 1990

90/80 Anil GABA and 'Usk( Survey Data in Inferences about PurchaseTM Robert WINKLER Bekaviourm , October 1990 1991

9041 Tawilik lELASSI 'Du Prised as Fakir: mks et Orientations desTM Spews Isteractifs d'Aide h In Minos,'

October 199091/017744/S111

Luk VAN WASSENHOVE,Leonard FORTUIN and

*Operational Research Can Do More for ManagersThan They Meld;

Paul VAN BEEK January 19919042 Charles WYPLOSZ 'Monetary Union and rural Policy Discipline.'Er November 1990 91/02

TM/S7I4Luk VAN WASSENHOVE,Leonard FORTUIN and

'Operational Research and Environment,'January 1991

90/83 Nathalie DIERKENS and misfortunes Asymmetry and Corporate Paul VAN BEEKFIN/7M Bernard SINCLAIR-DESGAGNE Communication: Results of a Pilot Study,

November 1990 91/03 Pekka HIETALA and 'An Implicit Dividend Increase is Rights Issues:FIN Timo LOYITYNIEMI Theory aged Evidence,' January 1991

90/84 Philip M. PARKER *The Effect of Advertising nu Price sad Quality:MKT The Optometric Industry Revisited,• 91/04 Lars Tyge NIELSEN •Two-rml Severalties. Factor Structure and

December 1990 FIN Robustness.' January 1991

90/35 Avijit GHOSH and 'Optimal r...kis and Location in Competitive 91/05 Susan SCHNEIDER •Marsogimg Beasedaries is Organisations;MKT Vika. T1BREWALA Markets; November 1990 OB January 1991

90/36 Olivier CADOT and 'Prudence and Success in Politics, November 1990 91/06 Manfred KETS DE VRIES, •Usderskieding the Leader-Strategy leterface:EP/TM Bernard SINCLAIR-DESGAGNE On Danny MILLER and Application of the Strategic Relationship Interview

Alain NOEL Method,* January 1990 (19111, revised April 1990)

91/07 Olivier CADOT "Lending to Insolvent Countries: A ParadoxicalEl' Story," January 1991 91/19

MKT

Vikas TIBREWALA and "An Aggregate Test of Purchase Regularity",Bruce BUCHANAN March 1991

91/08 Charles WYPLOSZ "Post-Reform East and West: CapitalEP Accumulation and the Labour Mobility 91/20 Darius SABAVALA and "Monitoring Short-Run Changes in Purchasing

Constraint," January 1991 MKT Vikas TIBREWALA Behaviour", March 1991

91/09 Spyros MA KRIDAKIS "What can we Learn from Failure?", February 1991 91/21 Summitry GHOSHAL, "Intermit Comnsmica6on within MNCa: TheTM SM Harry KORINE and Influence of Formal Structure Versus Integrative

Gabriel SZULANSK1 Processes", April 199191/10 Luc Van WASSENHOVE and "Integrating Scheduling with Hatching andTM C. N. POTTS Lot-Fazing: A Review of Algorithms and 91/22 David GOOD, "EC Integration and the Structure of the Franco-

Complexity", February 1991 EP Lars-Hendrik ROLLER and American Airline Industries: Implications forRobin SICKLES Efficiency and Welfare", April 1991

91/11 Luc VAN WASSENHOVE et al. "Multi-Item Lotsizing in Capacitated Multi-StageTM Serial Systems", February 1991 91/23 Spyros MAKRIDAKIS and "Exponential Smoothing: The Effect of Initial

TM Michele HIBON Values and Lon Functions on Post-Sample91/12 Albert ANGEHRN "Interpretative Computer Intelligence: A Link Forecasting Accuracy", April 1991 (Revision ofTM between Users, ModeLs and Methods in DSS",

February 1991

90/46)

91/24 Louis LE BLANC and "An Empirical Assessment of Choice Models for91/13EP

Michael BURDA "Labor and Product Markets in Czechoslovakia andthe Ex-GDR: A Twin Study", February 1991

TM Tawfik JELASSI Software Evaluation and Selection", May 1991

91/25 Luk N. VAN WASSENHOVE and "Trade-Offal What Trade-Offs?" April 199191/14 Roger BETANCOURT and "The Output of Retail Activities: French SM/TM Charles J. CORBETTMKT David GAUTSCHI Evidence", February 1991

91/26 Luk N. VAN WASSENHOVE and "Single Machine Scheduling to Minimize Total Late

91/15OB

Manfred F.R. KETS DE VRIES "Exploding the Myth about Rational Organisationsand Executives", March 1991

TM C.N. POTTS Work", April 1991

91/27 Nathalie DIERKENS "A Discussion of Correct Measures of Information

91/16 Arnoud DE MEYER and "Factories of the Future: Executive Summary of FIN Asymmetry: The Example of Myers and Mapes

TM Kasre FERDOWS et.al. the 1990 International Manufacturing FuturesSurvey", March 1991

Model or the Importance of the Asset Structure ofthe Firm", May 1991

91/17 Dirk CATTRYSSE, "Heuristics for the Discrete Lotsizing: and 91/28 Philip M. PARKER "A Note on: 'Advertising and the Price and Quality

TM Roelof KUIK,

Marc SALOMON and

Scheduling Problem with Setup Times", March 1991 MKT of Optometric Services', June 1991

Luk VAN WASSENHOVE 91/29 Tawfik JELASSI and "An Empirical Study of an Interactive, Session-

TM Abbas FOROUGHI Oriented Computerised Negotiation Support System

91/18 C.N. POTTS and "Approximation Algorithms for Scheduling a Single (NSS)", June 1991

7M Luk VAN WASSENHOVE Machine to Minimize Total Late Work",March 1991

91/30 Wilfried R. VANHONACKER and "Using Meta-Analysis Results in Bayesian Updating:MKT Lydia I. PRICE The Empty Cell Problem", June 1991 91/43 Sumantra GHOSHAL and "Building Transnational Capabilities: The

SM Christopher BARTLETT Management Challenge", September 199191/31 Reno! KABIR and "Insider Trading Restrictions and the StockFIN Theo VERMAELEN Market", June 1991 91/44 Sumantra GHOSHAL and "Distributed Innovation it the 'Differentiated

SM Nitin NOHRIA Network' Multinational", September 199191/32 Susan C. SCHNEIDER "Organisational Sememaking: 1992", June 1991OR 91/45 Philip M. PARKER "'llae Effect of Advetiising on Price and Quality:

MKT An Empirical Study of Eye Examinations, Sweet91/33 Michael C. BURDA and "German Trade Unions after Unification - Third Lemons and Self-Deceivers", September 1991EP Michael FUNKE Degree Wage Discriminating Monopolists?",

lune 1991 91/46 Philip M. PARKER "Pricing Strategies in Markets with Dynamic

91/34 lean DERMINE "The BIS Proposal for the Measurement of InterestMKT Elasticities", October 1991

FIN Rate Risk, Some Pitfalls", lune (991 91/47 Philip M. PARKER "A Study of Price Elasticity Dynamics UsingMKT Parsimonious Replacement/Multiple Purchase

91/35FIN

Jean DERMINE "The Regulation of Financial Services in the EC,Centralization or National Autonomy?" lune 1991

Diffusion Models", October 1991

91/48 H. Landis GABEL and "Managerial Incentives and Environmental91/36 Albert ANGEHRN "Supporting Multicriteria Decision Making: New EP/TM Bernard SINCLAIR-DESGAGNE Compliance", October 1991TM Perspectives and New Systems", August 1991

91/49 Bernard SINCLAIR-DESGAGNE "The First-Order Appfeach to Multi-Task91/37 Ingo WALTER and "The Introduction of Universal Banking in Canada: TM Principsi-Agest Problems", October 1991EP Hugh THOMAS An Event Study", August 1991

91/50 Luk VAN WASSENHOVE and "Row Green is Your Manufacturing Strategy?'91/38 Ingo WALTER and "National and Global Competitiveness of New York SM/TM Charles CORBETT October 1991EP Anthony SAUNDERS City as • Financial Center", August 1991

91/51 Philip M. PARKER "Choosing Amass Diffusion Models: Some91/39EP

Ingo WALTER andAnthony SAUNDERS

"Reconfiguration of Banking and Capital Marketsin Eastern Europe", August 1991

MKT Empirical Guidelines", October 1991

91/52 Michael BURDA and "Human Capital, Investment and Migration in an91/40TM

Luk VAN WASSENHOVE,Dirk CATTRYSSE end

"A Set Partitioning Heuristic for the GeneralizedAssignment Problem", August 1991

Charles WYPLOSZ Integrated Europe", October 1991

Marc SALOMON 91/53 Michael BURDA and "Labour Mobility and German Integration: SomeCharles WYPLOSZ Vignettes", October 1991

91/41TM

Luk VAN WASSENHOVE,M.Y. KOVALYOU and

"A Fully Polynomial Approximation Scheme forScheduling a Single Machine to Minimize Total 91/54 Albert ANGEHRN "Stimulus Agents: An Alternative Framework for

C.N. POTTS Weighted Late Work", August 1991 TM Computer-Aided Decision Making", October 1991

91142 Rob R. WEITZ and "Solving A Multi-Criteria Allocation Problem:TM Tawfik IELASSI A Decision Support System Approach",

August 1991

91/55 Robin HOGARTH,

EP/SM Claude MICHAUD,

Yves DOZ and

Ludo VAN DER HEYDEN

"Longevity of Business Finns: A Four-Stage

Framework for Analysis", November 1991

91/56 Bernard SINCLAIR-DESGAGNE "Aspirations and Economic Development",

TM/EP November 1991

91/57 Lydia 1. PRICE "The Indirect Effects of Negative Information on

MKT Attitude Change", November 1991

91/58 Manfred F. R. KM'S DE VRIES "Leaders Who Go Crazy", November 1991

OB

91/59 Paul A. L. EVANS

OB

91/60 Xavier DE GROOTE

TM

91161 Arnoud DE MEYER

TM

91/62 Philip PARKER and

MKT Hubert GATIGNON

"Management Development as Glue Technology",

November 1991

"Flexibility and Marketing/Manufacturing

Coordination", November 1991 (revised)

"Product Development in the Textile Machinery

Industry", November 1991

"Specifying Competitive Effects in Diffusion

Models: An Empirical Analysis", November 1991