The internal labor markets of business groups

This paper provides micro evidence of labor mobility inside business groups. We show that worker flows between firms in the same group are stronger than with unaffiliated firms. Moreover, the reallocation of top workers between group firms is more sensitive to international shocks. Top workers that...

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Bibliographic Details
Published in:Journal of corporate finance (Amsterdam, Netherlands) Netherlands), 2021-08, Vol.69, p.102017, Article 102017
Main Authors: Huneeus, Federico, Larrain, Borja, Larrain, Mauricio, Prem, Mounu
Format: Article
Language:English
Subjects:
Business groups
Internal labor markets
Labor reallocation
Trade shocks
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Summary:This paper provides micro evidence of labor mobility inside business groups. We show that worker flows between firms in the same group are stronger than with unaffiliated firms. Moreover, the reallocation of top workers between group firms is more sensitive to international shocks. Top workers that move within the group in response to shocks reach higher positions and earn higher wages. We find suggestive evidence that productivity increases when firms receive same-group top workers. Our results are consistent with the hypothesis that, in response to changing opportunities, joint ownership eases the redeployment of workers endowed with general management skills.
ISSN:0929-1199
1872-6313
DOI:10.1016/j.jcorpfin.2021.102017