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The Internal Labor Markets of Business Groups

Author

Listed:
  • Cristobal Huneeus
  • Federico Huneeus
  • Borja Larrain
  • Mauricio Larrain
  • Mounu Prem

Abstract

This paper provides micro evidence of labor mobility inside business groups. We show that worker flows between firms in the same group are stronger than with unaffiliated firms. Moreover, the reallocation of top workers between group firms is more sensitive to international shocks. Top workers that move within the group in response to shocks reach higher positions and earn higher wages. We find suggestive evidence that productivity increases when firms receive same-group top workers. Our results are consistent with the hypothesis that, in response to changing opportunities, joint ownership eases the redeployment of workers endowed with general management skills.

Suggested Citation

  • Cristobal Huneeus & Federico Huneeus & Borja Larrain & Mauricio Larrain & Mounu Prem, 2021. "The Internal Labor Markets of Business Groups," Working Papers Central Bank of Chile 902, Central Bank of Chile.
    • Handle: RePEc:chb:bcchwp:902
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    File URL: https://www.bcentral.cl/documents/33528/133326/DTBC_902.pdf
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    Citations

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    Cited by:

    1. He, Yuhan & Lyu, Jinqiu, 2025. "Export controls and innovation transfer within Chinese business groups: Evidence from the U.S. entity list," Research Policy, Elsevier, vol. 54(9).
    2. Giacinta Cestone & Chiara Fumagalli & Francis Kramarz & Giovanni Pica, 2024. "Exploiting Growth Opportunities: The Role of Internal Labour Markets," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(5), pages 2676-2716.
    3. Lee, Kyounghun & Oh, Frederick Dongchuhl & Shin, Donglim & Yoon, Heejin, 2023. "Internal labor markets and corporate innovation: Evidence from Korean chaebols," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 146-162.
    4. F Aldunate & F GonzÔøΩlez & M Prem & F UrzÔøΩa, 2019. "The Evolution of Ownership Structures: Privatization, Business Groups, and Pyramids," Documentos de Trabajo 17348, Universidad del Rosario.
    5. repec:osf:socarx:z8f4h_v1 is not listed on IDEAS
    6. Aldunate, Felipe & González, Felipe & Prem, Mounu, 2024. "The limits of hegemony: U.S. banks and Chilean firms in the Cold War," Journal of Development Economics, Elsevier, vol. 166(C).
    7. Pablo Doucet & Ignacio Requejo & Isabel Suárez-González, 2024. "Business groups’ internal labour markets and SME labour productivity," Small Business Economics, Springer, vol. 62(2), pages 707-725, February.

    More about this item

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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