Reaffirming Relationship-Specific Investments: Comments on Miwa and Ramseyer's 'Rethinking Relationship-Specific Investments'

Safeguarding Specific Human Capital Investments

When a firm changes its unique mix of products, markets, and technologies, some of employees’ previously acquired human capital depreciates. As a result, the firm can credibly renegotiate down employees’ quasi rents, which it had promised them as a reward for their human capital investments. We show that linking employees’ pay to total firm value, a widely observed phenonemon in practice, can m...

Linking IT use to benefits in interorganizational networks: the mediating role of relationship-specific intangible investments

On the relation between asset ownership and specific investments

We report results from an experiment based on a simplified version of Hart's (1995) property rights theory of the firm. Only one manager invests and this investment is completely specific. In that case the theory predicts that the level of investment is not affected by the level of no-trade payoffs if these payoffs are modeled as threat points (as Hart does). If instead no-trade payoffs are mod...

Co-Worker-Specific Investments and Stability of Top Management Teams∗

We investigate the contribution of co-worker-specific investments to the value of employment relationships between senior executives and firms. Given the difficulty in directly measuring co-worker-specific human capital, we take an indirect approach by analyzing the change in the composition of top management teams when a key member of the team (the CEO) departs. Our empirical analysis establis...

The Interactive Relationship between Economic Growth and Foreign Direct Investments (FDI): A VAR Analysis in Iran

T he impact of FDI on economic growth is neither homogeneous, nor completely clarified. Due to accumulation of capital in the host economy, FDI is expected to encourage the incorporation of new inputs and technologies in the process of production. However, the impact of FDI on economic growth is not so shaped up in empirical studies. Accordingly, while some studies remarked a positiv...