IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/17890.html

Exploiting Growth Opportunities: The Role of Internal Labor Markets

Author

Listed:
  • Cestone, Giacinta
  • Fumagalli, Chiara
  • Kramarz, Francis
  • Pica, Giovanni

Abstract

We explore how business groups use internal labor markets (ILMs) in response to changing economic conditions. We show that following the exit of a large industry competitor, group affiliated firms expand and gain market share by increasing their reliance on the ILM to ensure swift hiring, especially of technical managers and skilled blue collar workers. The ability to take advantage of this shock to growth opportunities is greater in firms with closer access to their affiliates’ human capital, as geographical proximity facilitates employee relocations across units. Overall, our findings point to the ILM as a prominent mechanism making affiliation with a business group valuable at times of change. For the ILM to perform its role in the face of industry shocks, group sectoral diversification must be combined with geographical proximity between affiliates.

Suggested Citation

  • Cestone, Giacinta & Fumagalli, Chiara & Kramarz, Francis & Pica, Giovanni, 2023. "Exploiting Growth Opportunities: The Role of Internal Labor Markets," CEPR Discussion Papers 17890, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:17890
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP17890
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. is not listed on IDEAS
    2. Charruau, Paul & Epaulard, Anne, 2025. "Finding a better job: The geography of socio-professional mobility during working life," Regional Science and Urban Economics, Elsevier, vol. 115(C).
    3. Labanca, Claudio & Molina, Danielken & Muendler, Marc-Andreas, 2024. "Preparing for export opportunities," Journal of International Economics, Elsevier, vol. 152(C).
    4. Bo Cowgill & Jonathan M. V. Davis & B. Pablo Montagnes & Patryk Perkowski, 2025. "Stable Matching on the Job? Theory and Evidence on Internal Talent Markets," Management Science, INFORMS, vol. 71(3), pages 2508-2526, March.

    More about this item

    Keywords

    ;

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:17890. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CEPR (email available below). General contact details of provider: https://cepr.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.