Performance Consequence of Manager Transfer: A Case of Korean Business Groups

• In Event: 117 - Regular Session. Economic Sociology: Embeddedness, Hybridity and Economic Performance in Asian Capitalisms

Abstract

Internal sharing of managerial talents is a prevalent practice of human resource management in an organization arrangement of business group. We examine whether a business group-affiliated firm creates value by pooling managerial talents from other member firms. Investigating senior managers’ career profiles in Korean business groups, we find that a group-affiliated firm’s proportion of executives who have experienced across multiple member firms through their careers has a positive effect on the firm performance. We specify firm-level and economy-wide conditions under which this positive effect can be salient. The positive effect of managerial sharing on firm performance remains after accounting for endogeneity between executive composition and firm performance.

Author

• Young-Choon Kim, Ulsan National Institute of Science and Technology