REGIONAL LABOR-MARKET INFLUENCES ON MANAGERIAL REMUNERATION IN SMALL AND MEDIUM-SIZED ENTERPRISES IN ENGLAND - AN EMPIRICAL-ANALYSIS

This paper empirically examines the factors that determine managers' r emuneration in a sample of 97 UK small and medium-sized enterprises (S MEs). The sample was partitioned into two groups, one comprising of 69 managers working for firms located in the South East (SE) economic pl anning region and the other comprising 28 managers working for firms l ocated in 'other English regions' (OR). The average remuneration of ma nagers located in the SE in the latter half of 1988 was 30 000 Pounds whilst for those located in the OR their remuneration was significantl y less and averaged only 17 500 Pounds for the same period. Several wa ge equations were then estimated to determine if this difference in re muneration was due primarily to differences in the managers' human cap ital and/or employing-firm characteristics or whether, after controlli ng for these factors, it was possible to detect a significant independ ent locational influence. The results indicate that both human capital (primarily the managers' age and qualifications) and firm/job-specifi c factors (their relative workloads, the size and growth of the firm i n terms of assets) and the location of their employing firms were able to explain a large proportion of the variance in remuneration. Though the locational effect was statistically significant, after controllin g for differences in human capital and job/firm-specific factors, the remuneration of the SE managers was estimated to be only some 3000 Pou nds higher than that of managers located elsewhere in England.