Session 244

Labor Markets and Strategic Human Capital

Track L

Date: Tuesday, September 23, 2014


Time: 15:30 – 16:45


Room: Paris

Session Chair:

  • Matthew Bidwell, University of Pennsylvania

Title: Competitive Intensity in the Market for Human Capital: How Does Who You Hire From Affect How Much You Pay?


  • Matthew Bidwell, University of Pennsylvania
  • Olivier Chatain, HEC-Paris

Abstract: We develop theory and findings on the effects of competitive intensity in the labor market, based on variation in the specific companies that a focal firm recruits from. Drawing on value based strategy theories, we develop a theory of wages in a market with heterogeneous firms matching heterogeneous workers. Our arguments suggest that companies that are more central to the hiring network and those that hire more workers will need to pay higher wages, while those that hire from a wider diversity of industries will pay lower wages. We test these arguments using unique data from a careers survey of MBA alumni. These data allow us to create the network of firms hiring such workers from one another and to determine what wages they pay.

Title: Corporate Social Responsibility as a Remedy for Moral Hazard?


  • Caroline Flammer, Boston University
  • Jiao Luo, University of Minnesota

Abstract: This study examines whether corporate social responsibility (CSR) acts as a remedy for moral hazard in the workplace. To obtain exogenous variation in employees' propensity to engage in moral hazard, we exploit a natural experiment provided by large increases in state-level unemployment insurance (UI) benefits. Higher UI benefits render the threat of termination less effective and hence increase employees' incentives to shirk. Using a difference-in-differences methodology, we find that companies react to increases in UI benefits by increasing their employee-related CSR. This finding supports the view that CSR is a valuable resource that allows companies to motivate their employees. We further provide evidence that the increase in CSR is larger for companies operating in industries that are more labor intensive and more competitive.

Title: Learning-by-Hiring: International Employee Mobility and the Growth of Emerging Market Firms at Home


  • Pao-Lien Chen, National Tsing Hua University
  • Chuan-Kai Lee, National Tsing Hua University

Abstract: This paper investigates how the domestic growth of emerging market firms are affected by the mobility of human capital from foreign firms based in more developed markets. Empirical results based on a sample of local firms in the Zhongguanchu Science Park, Beijing in China show that hiring former foreign firm employees enhances local firms’ growth in local sales, and this positive impact decreases as the local firms grow in age and size. Further, hiring former employees of foreign firms from their local subsidiaries generates a lower growth impact than hiring from their headquarters or other foreign subsidiaries. The finding suggest that the consequence of international employee mobility should depend on the characteristics of the hiring firms and the hired foreign-experienced employees.

Title: The Value of General Management Experience in the Market for Executive Human Capital


  • Eric Lin, Harvard University
  • Boris Groysberg, Harvard University

Abstract: We use proprietary global search firm data capturing compensation levels of executives to investigate the compensation impact of prior general management experience. Our preliminary findings suggest prior general management experience is valued by those firms hiring executives from the outside. Executives with more years of general management experience are paid more, controlling for industry, firm, and job characteristics, as well as measures of accumulated human capital. The benefit of such work experience differs by situation. The linkage between general management experience and compensation is particularly salient for executives switching jobs over industry and country boundaries. We provide initial findings on contextual determinants of how general management human capital is valued and outline a path forward for developing richer insights.

All Sessions in Track L...

Sun: 08:00 – 09:15
Session 280: Strategic Human Capital and Human Resource Management: The Role of Context
Sun: 09:30 – 10:45
Session 285: Micro-foundations and Human Capital: The Power of Multiple Perspectives
Sun: 11:15 – 12:30
Session 281: New Frontiers: CSR, Ethics and Human Capital
Sun: 15:45 – 17:00
Session 242: The Strategic Effects of Management Human Capital
Sun: 17:15 – 18:30
Session 608: Strategic Human Capital IG Business Meeting
Mon: 11:00 – 12:15
Session 402: Microfoundations of Strategic Human Capital
Mon: 14:45 – 16:00
Session 248: Strategic Talent Management
Mon: 16:30 – 17:45
Session 245: Human Capital Complementarities
Tue: 11:00 – 12:15
Session 247: Human Capital and Knowledge as Strategic Resources
Tue: 15:30 – 16:45
Session 244: Labor Markets and Strategic Human Capital
Tue: 17:15 – 18:30
Session 243: Strategic Perspectives on Employee Turnover and Retention

Strategic Management Society