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CEO Tournaments: A Cross-Country Analysis of Causes, Cultural Influences and Consequences

Kristi Minnick's paper on CEO Tournaments

Examining CEO tournament structure (measured as the ratio of pay between the CEO and other top executives) across countries and find it to be steeper in the U.S. than in other countries. Testing the primary implications of tournament theory, we find that across countries, the tournament structure tends to be positively related to firm value. Further, we find that the tournament structure itself varies across firms systematically according to firm and country characteristics. In particular, the cultural values of Power Distance, Fair Income Differences and Competition are significantly associated with differences in tournament structures.