Back Vicente Cuñat awarded with the Jaime Fernández de Araoz prize in Corporate Finance

Vicente Cuñat awarded with the Jaime Fernández de Araoz prize in Corporate Finance

17.05.2007

 

May 17 2007

Vicente Cuñat, finance professor of the Department of Economics and Business of the Universitat Pompeu Fabra has been awarded with the Jaime Fernández de Araoz prize for an article entitled “Globalization and the provision of incentives inside the firm” written jointly with Professor María Guadalupe of Columbia University.

The prize, sponsored by Banco Santander and Universia, has the objective to contribute to the development of corporate finance knowledge, both from a research point of view but also from the point of view of practitioners.

The research associated to the prize is an empirical study of how do firms shape their executive pay policies to the competitive environment in which they operate. The results show that those firms that face higher international competition pay higher average salaries, associate more pay to performance, have a higher wage dispersion within the firm, have a higher demand and reward for talent and are more aggressive in their firing and hiring policies. Overall, the results point out in the direction that the sensitivity of firm performance to the correct or incorrect decisions of its employees grows with international competition, being the reaction of the firms to offer a higher demand and reward of their effort and ability.
 

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