Efficiency Wage and Supervision: Theory and Application to the Ivorian Manufacturing Sector.

A simple model is set up to analyse the tradeoff between wage and monitoring costs in an efficiency-wage framework. It is then applied to a panel of firms in the Ivorian manufacturing sector, split in different industries. The parameter restrictions derived from the theoretical model are not rejected for the investment goods, the intermediate goods and the non-food consumption goods sectors, while some puzzling results are found for the food and agro-industrial sectors. Copyright 1997 by Oxford University Press.