Managers’ Affiliation Ties and Subordinates’ Inter-firm Mobility: Evidence from Large US Law Firms
50 Pages Posted: 29 Aug 2020
Date Written: July 22, 2020
We hypothesize that employee mobility between organizations will be lower when the organizations’ managers share affiliation ties. We test this idea by examining inter-organizational employee mobility between large corporate law practices. We find that a practice area is less likely to hire attorneys from a rival practice area when leaders of the two practice areas attended the same law school at the same time, our proxy for the presence of an affiliation tie. The negative relationship is stronger for the hiring of higher-ranked attorneys and when the rival law firms have similar measures of organizational culture. Exploiting appointments of new practice leaders, we find a sharp and immediate decline in inter-organizational mobility following an appointment that creates an affiliation tie between the leadership of the practice areas. Our theory and results shed light on the previously unexamined role of rival managers’ ties in their subordinates’ inter-organizational mobility.
Keywords: Inter-organizational hiring, human capital, affiliation networks
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