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The diffusion of knowledge via managers’ mobility

Mion, Giordano, Opromolla, Luca David and Sforza, Alessandro (2016) The diffusion of knowledge via managers’ mobility. CEP discussion paper (CEPDP1458). Centre for Economic Performance (CEP), London, UK.

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Abstract

Better managers and managerial practices lead to better firm performance. Yet, little is known about what happens when managers move across firms. Does a firm hiring a good manager improve its performance? If yes is there some valuable knowledge the manager has acquired and successfully diffused to the new firm? In order to answer these questions, we use information related to specific activities the manager was involved in when working for previous firms. More specifically, we use information on whether the manager has worked in the past for firms exporting to a specific destination country or a specific product. Our data is rich enough to allow controlling for both manager and firm unobservables and wash out any time-invariant ability of the manager as well as overall firm performance. We find that the export experience gained by managers in previous firms leads their current firm towards higher export performance, and commands a sizable wage premium for the manager. We use several strategies to deal with endogeneity including an exogenous event study: the sudden end of the Angolan civil war in 2002. We further refine our analysis by looking at different types of managers (general, production, financial and sales) and show how specific export experience interacts with the degree of product differentiation and/or the financial vulnerability of a firm’s products as well as with rising import competition from China.

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/
Additional Information: © 2016 The Authors
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
JEL classification: F - International Economics > F1 - Trade > F16 - Trade and Labor Market Interactions
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc.
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior
M - Business Administration and Business Economics; Marketing; Accounting > M2 - Business Economics
Sets: Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 26 Jan 2017 15:44
Last Modified: 20 Sep 2019 23:23
Projects: CEP Trade Programme
Funders: Economic and Social Research Council
URI: http://eprints.lse.ac.uk/id/eprint/69035

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