Do Ex-Bankers Benefit Non-Financial Firms? Evidence from Job Transitions

Abstract

We document the beneficial impact of human capital transfer from banks to non-financial firms: firms hiring ex-bankers have higher asset and employment growth and easier access to bank loans. Using a unique, employee-employer-matched dataset from Russia and exogenous variation in ex-bankers’ supply due to bank-branch-network restructurings, we establish the causal interpretation of these patterns. We also show that ex-bankers’ human capital consists of bank-specific and banking industry expertise (with the latter being acquired through interbank connections). Firms recognize the value of ex-bankers, as ex-bankers’ receive significant salary bonuses when a new bank loan is issued to the firm.

Keywords: bank-firm lending relations, human capital transfer

JEL Classification: G21, G32, J24