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The purpose of this study is to estimate the total economic costs associated with filling a vacated finance faculty line. These economic costs include both explicit and opportunity costs associated with the production process. Hiring costs include explicit costs such as advertising the position and implicit costs such as the opportunity costs of faculty time spent in various search committee activities. In addition, the recent market for finance professors has included a significant mark-to-market salary component associated with replacing departed faculty with new hires. This paper utilizes survey data from recent finance faculty vacancies at AACSB International accredited schools to estimate the total hiring cost equation.

The Total Economic Costs Of Finance Faculty Replacement