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I used to work at Goldman Sachs! How firms benefit from organizational status in the market for human capital

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  • Matthew Bidwell
  • Shinjae Won
  • Roxana Barbulescu
  • Ethan Mollick

Abstract

type="main" xml:id="smj2272-abs-0001"> How does employer status benefit firms in the market for general human capital? On the one hand, high status employers are better able to attract workers, who value the signal of ability that employment at those firms provides. On the other hand, that same signal can help workers bid up wages and capture the value of employers' status. Exploring this tension, we argue that high status firms are able to hire higher ability workers than other firms, and do not need to pay them the full value of their ability early in the career, but must raise wages more rapidly than other firms as those workers accrue experience. We test our arguments using unique survey data on careers in investment banking. Copyright © 2014 John Wiley & Sons, Ltd.

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  • Matthew Bidwell & Shinjae Won & Roxana Barbulescu & Ethan Mollick, 2015. "I used to work at Goldman Sachs! How firms benefit from organizational status in the market for human capital," Strategic Management Journal, Wiley Blackwell, vol. 36(8), pages 1164-1173, August.
    • Handle: RePEc:bla:stratm:v:36:y:2015:i:8:p:1164-1173
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    Cited by:

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    3. Heski Bar-Isaac & Raphaël Lévy, 2022. "Motivating Employees through Career Paths," Journal of Labor Economics, University of Chicago Press, vol. 40(1), pages 95-131.
    4. Esen, Tekin & Dahl, Michael S. & Sorenson, Olav, 2023. "Jockeys, horses or teams? The selection of startups by venture capitalists," Journal of Business Venturing Insights, Elsevier, vol. 19(C).
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    6. Sabit K. Sonu & I. M. Jawahar & Gordhan K. Saini, 2022. "Influence of return on investment and labor market conditions on job seekers’ preferences of employment attributes in the Indian context," Asian Business & Management, Palgrave Macmillan, vol. 21(2), pages 286-315, April.
    7. David Tan & Christopher I. Rider, 2017. "Let them go? How losing employees to competitors can enhance firm status," Strategic Management Journal, Wiley Blackwell, vol. 38(9), pages 1848-1874, September.
    8. Amanda J. Sharkey & Balázs Kovács, 2018. "The Many Gifts of Status: How Attending to Audience Reactions Drives the Use of Status," Management Science, INFORMS, vol. 64(11), pages 5422-5443, November.
    9. Katariina Mueller-Gastell, 2023. "Poach or Promote? Job Sorting and Gender Earnings Inequality across U.S. Industries," Working Papers 23-23, Center for Economic Studies, U.S. Census Bureau.
    10. David Kryscynski & Russ Coff & Benjamin Campbell, 2021. "Charting a path between firm‐specific incentives and human capital‐based competitive advantage," Strategic Management Journal, Wiley Blackwell, vol. 42(2), pages 386-412, February.
    11. Joseph Raffiee, 2017. "Employee Mobility and Interfirm Relationship Transfer: Evidence from the Mobility and Client Attachments of United States Federal Lobbyists, 1998–2014," Strategic Management Journal, Wiley Blackwell, vol. 38(10), pages 2019-2040, October.
    12. Seung Hoon D. Chung & Simon C. Parker, 2023. "Founder affiliations: jobseeker reactions and impact on employee recruitment by start-up ventures," Small Business Economics, Springer, vol. 61(1), pages 259-283, June.
    13. Ferreira, Daniel & Nikolowa, Radoslawa, 2024. "Prestige, promotion, and pay," LSE Research Online Documents on Economics 118369, London School of Economics and Political Science, LSE Library.
    14. Anne Bowers & Matteo Prato, 2019. "The Role of Third-Party Rankings in Status Dynamics: How Does the Stability of Rankings Induce Status Changes?," Organization Science, INFORMS, vol. 30(6), pages 1146-1164, November.
    15. Michael C. Withers & Michael D. Howard & Laszlo Tihanyi, 2020. "You’ve Got a Friend: Examining Board Interlock Formation After Financial Restatements," Organization Science, INFORMS, vol. 31(3), pages 742-769, May.
    16. Luo, Lingli & Ma, Xufei & Makino, Shige & Shinkle, George A., 2020. "Cluster status and new venture creation," Journal of Business Venturing, Elsevier, vol. 35(5).
    17. Aleksandra Kacperczyk & Matt Marx, 2016. "Revisiting the Small-Firm Effect on Entrepreneurship: Evidence from Firm Dissolutions," Organization Science, INFORMS, vol. 27(4), pages 893-910, August.
    18. Evan Starr & Justin Frake & Rajshree Agarwal, 2019. "Mobility Constraint Externalities," Organization Science, INFORMS, vol. 30(5), pages 961-980, September.
    19. Matteo Prato & Fabrizio Ferraro, 2018. "Starstruck: How Hiring High-Status Employees Affects Incumbents’ Performance," Organization Science, INFORMS, vol. 29(5), pages 755-774, October.

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