The Disciplining Effect of Labor Mobility on Managerial Myopia

47 Pages Posted: 23 May 2018 Last revised: 7 Oct 2019

See all articles by Lars Helge Hass

Lars Helge Hass

Lancaster University - Management School; University of Iowa - Henry B. Tippie College of Business

Paul Hribar

University of Iowa - Henry B. Tippie College of Business

Fani Kalogirou

University of Oxford - Said Business School

Date Written: December 15, 2018

Abstract

We examine whether firms in industries with greater labor mobility exhibit less myopic behavior. Using an occupation-based measure of labor mobility for a large sample of US firms, we show that greater labor mobility is associated with fewer myopic operating decisions. This association is stronger in industries with specialized labor and less unionization and in highly competitive industries. In years with large equity issuances, labor mobility moderates the amount of myopia. We find consistent results using a difference-in-differences design with plausibly exogenous variation in labor mobility from changes in real estate transfer taxes. We also find consistent results when using the housing price index as an alternative measure of mobility. Taken together, our results suggest that greater labor mobility disciplines firms away from making myopic operating decisions to meet short-term objectives.

Keywords: managerial myopia; myopic operating decisions; employee relationships; labor mobility

JEL Classification: G34, J6, M41, M43

Suggested Citation

Hass, Lars Helge and Hribar, Paul and Kalogirou, Fani, The Disciplining Effect of Labor Mobility on Managerial Myopia (December 15, 2018). Available at SSRN: https://ssrn.com/abstract=3089993 or http://dx.doi.org/10.2139/ssrn.3089993

Lars Helge Hass (Contact Author)

Lancaster University - Management School ( email )

Department of Accounting and Finance
Lancaster, LA1 4YX
United Kingdom

University of Iowa - Henry B. Tippie College of Business ( email )

Dept. of Accounting
Iowa City, IA 52242-1000
United States

Paul Hribar

University of Iowa - Henry B. Tippie College of Business ( email )

Dept. of Accounting
Iowa City, IA 52242-1000
United States
319-335-1008 (Phone)

Fani Kalogirou

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

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