Review of Financial Studies· 2026Q1
Directing the Labor Market: Shared Directors and Employee Flows
- 6citations
- Q1SCImago
- 2026year
Short summary
Firms sharing a board director see a 20% drop in employee movement between them, particularly for higher-skilled workers.
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Key points
- Sharing a board director reduces employee flow between firms by approximately 20%.
- The effect is stronger when firms have greater potential gains from limiting worker mobility.
- Higher-skilled employees are most affected by this reduction in mobility.
- Firms with shared directors show lower internal promotion rates and no improvement in employee satisfaction.
AI-generated from the title and abstract; the full text is not read.
Abstract
Abstract Using résumé data on over 20 million U.S. workers, we find that the flow of employees between a pair of firms sharply drops by about 20% during periods in which the firms share a board director. This relationship is stronger in settings where firms have greater potential gains from limiting worker mobility and is most pronounced for higher-skilled employees. Moreover, we find more connected firms have lower rates of internal promotion and no improvements in employee satisfaction. The evidence is consistent with shared directors serving as a mechanism for labor market coordination. (JEL G34, G38, J42, J62, J08, K21, K31, M50)
The authors' abstract, as published at the source. Review of Financial Studies, 2026 · DOI ↗
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