respectively. This study began when Alberto Bayo was a visiting researcher at the Departament d' Economia de l' Empresa of the Universitat Autònoma de Barcelona. The authors would like to thank Vicente Salas, Emilio Huerta and two anonymous referees for their comments, and the BBVA Foundation and the BEC2001-2552-C03-01 project for their financial assistance.

Previous empirical research suggests that university spin-offs under-perform in economic terms compared to other new technology-based firms (NTBFs) in their early years. The usual explanations suggest a lower capabilities endowment of university spin-offs compared to other NTBFs. Using a longitudinal Spanish dataset we compare the evolution of firms' total factor productivity (capabilities endowment) in both kinds of firm. Productivity grew faster in university spin-offs and their initial underperformance disappeared after two or three years of operation. The evidence therefore suggests that university spin-offs have lower initial substantive capabilities but greater dynamic capabilities than independent NTBFs. Possible explanations are discussed.

The heads of R&D departments are those most responsible for the adaptation of firms' human resource management (HRM) practices to the idiosyncrasies of their departments. From their description, this paper analyzes the HRM practices in R&D departments and the adaptation achieved in four different firms. The data suggest that the main adaptations are produced primarily in recruiting and organizing the work of R&D personnel. In contrast to suggestions in the specialized literature, less adaptation is found in other HRM practices analyzed (managerial support and degree of delegation, compensation and career plans). Psychological theories of procedural justice and social comparison can improve our understanding of such results. The organizational structure affects the reference group for such comparisons and, consequently, the R&D managers' capacity to adapt such practices. Based on these arguments, the delegation of HRM practices to R&D departments will enhance the degree of adaptation of such policies.

This paper combines agency theory and internal‐labor‐market theories to explain the determinants of bonus payments among a large sample of top and middle managers from Spanish firms. A distinction is made between the decision whether to pay bonus or not and the size of the bonus. The empirical evidence confirms that the two decisions are determined by different factors. The results of the analysis show a trade‐off between short‐term and long‐term incentives (bonuses and promotion opportunities) as well as differences in the pattern of compensation policies across economic sectors and functional areas inside the firm.

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