Fight or Flight: Managing Stigma in Executive Careers
Strategic Management Journal, Vol. 29, pp. 557-567
24 Pages Posted: 29 May 2007 Last revised: 27 Nov 2008
Date Written: 2008
We examine the labor market consequences borne by executives who remain at financially distressed firms relative to those who flee to another employer to avoid the stigma of failure. Our study makes two contributions. First, we document an ex ante dimension of executive labor markets unaccounted for by ex post settling up models (e.g., Fama, 1980). Specifically, we show that executives who jump ship ¿ change employers in the two years prior to the failure ¿ suffer fewer labor market consequences than their counterparts who remain with the failing firm. Second, we extend the study of bankruptcy stigma to examine how that stigma might be managed by jumping ship.
Keywords: Stigma, Managerial labor markets, Management turnover, Financial distress, Ship jumping, Executive career management, Failure
JEL Classification: J44, J63, M14, M51
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
By Amanda Cowen