| One of the most prominent features of remuneration in Hawaii’s longline fisheries industry has been the norm of share contract regimes. This paper investigates whether the use of the share contract regime is positively correlated to increased economic returns. The principal-agent framework is applied to develop a theoretical model for the remuneration choice. Empirical estimation is conducted using a switching regression model that accounts for the effects of certain vessel characteristics on revenue, depending on remuneration regime used (i.e., share contract or flat wage), as well as the potential selection bias in the vessels’ contractual choice. Key findings from counterfactual simulations indicate: (a) a negative selection related to choosing share... |
