Given the importance of exploration in a firm’s overall innovation program, scholarshave sought to understand organizational factors that give rise to exploration-oriented innovations. We propose theory and empirical evidence that relates firms’ use of financial incentives to their...

Given the importance of exploration in a firm’s overall innovation program, scholars have sought to understand organizational factors that give rise to exploration-oriented innovations. We propose theory and empirical evidence that relates firms’ use of financial incentives to...

Using novel compensation data on white collar employees (WCE) in large, public U.S. firms, we examine their explicit financial incentives and implicit incentives arising from promotions and labor market opportunities. We find that employees with stronger (weaker) implicit incentives receive more...

We investigate the relationship between a firm's compensation structure and the extent to which its innovation is more exploration versus exploitation oriented. Specifically, we assess two aspects of a firm's compensation design—horizontal dispersion within pay levels and vertical tournament...