The Careers of Top Managers and Firm Openness: Internal Versus External Labour Markets
AbstractThis paper studies the careers of top managers using a large panel of firms. The main objective is to empirically evaluate the role of learning and human capital acquisition in promotion dynamics along with variables capturing the formation of internal labour market (ILM) practices. We find that promotion is negatively correlated with tenure, but that there is a non-linear negative duration dependence with elapsed time since the last promotion event. Firms showing a weaker degree of ILM are less prone to promote insiders. We next take the manager's career inside a firm as a sequence of promotion decisions, and use a nested structure of the promotion decision modelled as a nested logit model. �Results show that the top manager's progression nest into four types: loser, early starter, late beginner, and champion, and that the degree of ILM as a signigicant impact on the process of learning inside the firm.
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Bibliographic InfoPaper provided by Banco de Portugal, Economics and Research Department in its series Working Papers with number w200315.
Date of creation: 2003
Date of revision:
Find related papers by JEL classification:
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- M12 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Personnel Management; Executives; Executive Compensation
- M51 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Firm Employment Decisions; Promotions
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- Pedro Martins & Francisco Lima, 2006. "External recruitments and firm performance," Applied Economics Letters, Taylor & Francis Journals, vol. 13(14), pages 911-915.
- Machado, C. Sofia & Portela, Miguel, 2013. "Age and Opportunities for Promotion," IZA Discussion Papers 7784, Institute for the Study of Labor (IZA).
- repec:ese:iserwp:2009-11 is not listed on IDEAS
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