Baker, Gibbs and Holmstrom [Quarterly Journal of Economics 109 (1994) 881] [BGH] carried out a detailed description of the internal hierarchical structure of a firm together with its pay and promotion dynamics. Their work has become the basis of much theoretical work, but little attempt has been made to establish its generality. Accordingly, we replicate their analysis as closely as possible using data from a large British financial sector firm between 1989 and 1997. In many respects, our results are similar to those described by BGH, but they also differ in important ways, suggesting that more needs to be understood. (C) 2001 Elsevier Science B.V. All rights reserved.
- internal economics