Performance Management, Broadband Technology, and Restructuring – Econometric Analyses using Linked-Employer-Employee Data

Abstract

Since Coase (1937), various research streams in economics and business have analyzed the questions how and why individuals organize into firms. The different chapters of this thesis con-tribute to different streams of this vast literature but have important aspects in common: all stud-ies analyze individual workers and different worker groups within organizations, and all use large, representative linked-employer-employee panel data sets and panel data methods, in particular fixed effects regressions. Chapter 2 aims at providing generalizable evidence on the way in which a performance management and evaluation process (PMEP) as operationalized by the joint presence of an appraisal interview (AI) and a written target agreement (TA) affects employ-ee engagement. We make use of four waves from the time frame 2012 to 2018 of the Linked Personnel Panel, a large and representative German linked-employer-employee panel data set and employ individual and firm fixed effects regressions. We find a robust positive and statistical-ly significant effect of the PMEP on employee engagement, driven by both the AI and the TA, little to no effect heterogeneity across contextual factors, and mediation of the direct PMEP ef-fect by procedural fairness and goal clarity. The research goal of Chapter 3 is to provide causal evidence on how broadband internet introduction in Brazil has influenced firms’ internal employ-ment structures and whether firms have benefited from these changes. We employ data from 1996 to 2005 matching linked-employer-employee data on the universe of Brazilian firms in state capitals to data on the universe of main distribution frames that distribute internet and telephone signals and exploit a quasi-experimental difference-in-differences setting in conjunction with firm and state-year fixed effects. We find that broadband internet access decreases firm sizes, leads to decreases in firm mortality, and significantly reshapes both the occupational and educational composition of firms. We observe a significant expansion in the share of managers and labor market polarization both for occupational and educational groups, such that that layers at the very top and bottom of the occupational and educational pyramids expand, while intermediate layers decrease in terms of employment shares. Chapter 4 finally evaluates how relocation and separation restructuring measures influence within-firm labor structures and workers remaining in the restructuring firm. In this chapter, I use the 2009 to 2017 waves of the German linked-employer-employee LIAB data and employ firm fixed effects regressions in conjunction with a large set of contemporary and lagged control variables. My findings show substantial decreases in firm size, no effects on wages, expansions in the shares of managers, high-educated workers and workers with relatively high occupational positions and workers conducting complex tasks, while the shares of workers with lower positions in the occupational and educational hierarchies conducting less complex tasks decline.