Performance pay, firm size and export market participation: Evidence from matched employer–employee data

Abstract

The objective of this paper is to provide new evidence on the link between firm level characteristics (size and export) and the adoption of performance pay as part of worker remuneration. Our study exploits an employer–employee database with information on more than 200,000 workers at 26,055 Spanish firms. We find that the incidence of performance pay usually increases with firm size (at decreasing rates) and export status. However, we detect a wide variation among occupations, both in the prevalence of the two types of performance pay analysed and their relationship with size and export.