| In this dissertation I study how more competitive product markets affect three aspects of managerial labor markets---wage levels, pay-performance sensitivity and turnover---in a developing country. In chapter 2, I review relevant theoretical and empirical literature. I also study the comparative statics of a simple agency model with linear contracts to consider possible empirical implications.; In chapter 3, I argue that the Indian economic reforms or delicensing of 1991 made product markets more competitive and were exogenous in their timing. I create a dataset of managerial employees of 50 Indian firms over a period of 14 years based on Indian disclosure requirements. I find higher wages, a fall in pay-performance sensitivity and no change in turnover for Indian managers following the 1991 liberalizations.; In chapter 4, I perform a similar analysis but incorporating changes in India's trade policy as well. I find that trade liberalizations led to a fall in wages as opposed to deregulation. Contrasting the evidence in this paper with the existing theoretical models suggests that there exists a gap in the literature with space for a model incorporating the form of the managerial labor market. |
