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

Matthew Bidwell, Shinjae Won, Roxana Barbulescu, Ethan Mollick

Research output: Contribution to journalArticlepeer-review

Abstract

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.

Original languageEnglish (US)
Pages (from-to)1164-1173
Number of pages10
JournalStrategic Management Journal
Volume36
Issue number8
DOIs
StatePublished - Aug 1 2015
Externally publishedYes

Keywords

  • careers
  • human capital
  • investment banking industry
  • organizational status
  • rent appropriation

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management

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