Multi-bank holding companies file detailed financial statements on their subsidiary banks. The availability of these data allows for an empirical examination of the relation between accounting-based performance and personnel decision for lower-level managers. For our sample of Texas banks, we find that turnover of subsidiary bank managers is negatively related to subsidiary performance, while promotions are positively related to performance. Holding own-bank performance constant, turnover increases with holding-company performance, which is consistent with the view that turnover decisions are based on performance relative to a firm-specification benchmark.
|Number of pages||28|
|Journal||Journal of Accounting and Economics|
|State||Published - May 1994|
Bibliographical noteFunding Information:
*Kathy Farrell provided unusually diligent research assistance. We would like to thank participants in workshops at Chicago, Clemson, Florida, Georgia, Houston, Miami, Michigan, NBER, Rochester, Toronto, and Utah, as well as L. Bamber, B. Beranek, J. Coles, C. Collins, R. DeGenarro, J. Evans, J. Gaver, S. Gilson, B. Hermalin, S. Jones, L. Katz, S. Kale, E. Lazear, W. Marr, K. McLaughlin, B. Megginson, K. Murphy, B. Parrino, R. Shrieves, J. Sinkey, J. Wansley, G. Waymire, D. Winters, A. Wunsch, J. Zender, and especially an anonymous referee and Jerry Zimmerman for helpful suggestions. We acknowledge financial support from the Garn Institute of Finance, the Bradley Policy Research Center, the John M. Olin Foundation, and a Terry Research Fellowship. The paper was completed while David Blackwell was at the University of Georgia.
- Lower-level management turnover
- Relative-performance evaluation
ASJC Scopus subject areas
- Economics and Econometrics