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Can They Take It With Them? The Portability of Star Knowledge Workers' Performance

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Author Info

  • Boris Groysberg

    ()
    (Harvard Business School, Harvard University, Boston, Massachusetts 02163)

  • Linda-Eling Lee

    ()
    (Harvard Business School, Harvard University, Boston, Massachusetts 02163)

  • Ashish Nanda

    ()
    (Harvard Law School, Harvard University, Cambridge, Massachusetts 02138)

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    Abstract

    This paper examines the portability of star security analysts' performance. Star analysts who switched employers experienced an immediate decline in performance that persisted for at least five years. This decline was most pronounced among star analysts who moved to firms with lesser capabilities and those who moved solo, without other team members. Star analysts who moved between two firms with equivalent capabilities also exhibited a drop in performance, but only for two years. Those who switched to firms with better capabilities and those who moved with other team members exhibited no significant decline in short-term or long-term performance. These findings suggest that firm-specific skills and firms' capabilities both play important roles in star analysts' performance. In addition, we find that firms that hire star analysts from competitors with better capabilities suffered more extreme negative stock-market reactions than those that hire from comparable or lesser firms. These findings suggest that hiring stars may be perceived as value destroying and may not improve a firm's competitive advantage.

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    File URL: http://dx.doi.org/10.1287/mnsc.1070.0809
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    Bibliographic Info

    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 54 (2008)
    Issue (Month): 7 (July)
    Pages: 1213-1230

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    Handle: RePEc:inm:ormnsc:v:54:y:2008:i:7:p:1213-1230

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    Related research

    Keywords: firm-specific performance; team-specific performance; firm capabilities; productivity; mobility; knowledge workers;

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    Cited by:
    1. repec:cen:wpaper:13-54 is not listed on IDEAS
    2. Bradley, Daniel & Choi, Hyung-Suk & Clarke, Jonathan, 2011. "Working for the enemy? The impact of investment banker job changes on deal flow," Journal of Empirical Finance, Elsevier, vol. 18(4), pages 585-596, September.
    3. Paul Oyer & Scott Schaefer, 2010. "Personnel Economics: Hiring and Incentives," NBER Working Papers 15977, National Bureau of Economic Research, Inc.
    4. Klein, Peter G. & Mahoney, Joseph T. & McGahan, Anita M. & Pitelis, Christos N., 2012. "Who Is in Charge? A Property Rights Perspective on Stakeholder Governance," Working Papers 12-0102, University of Illinois at Urbana-Champaign, College of Business.
    5. Mahoney, Joseph T., 2012. "Towards a Stakeholder Theory of Strategic Management," Working Papers 12-0100, University of Illinois at Urbana-Champaign, College of Business.
    6. Blomkvist, Katarina & Kappen, Philip & Zander, Ivo, 2014. "Superstar inventors—Towards a people-centric perspective on the geography of technological renewal in the multinational corporation," Research Policy, Elsevier, vol. 43(4), pages 669-682.
    7. Daniel H. Weinberg, 2013. "Talent Recruitment and Firm Performance: The Business of Major League Sports," Working Papers 13-54r, Center for Economic Studies, U.S. Census Bureau, revised Feb 2014.

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