One Person can Make a Difference: How the Mobile Individual Affects Status of Hiring Firms

Abstract

The present paper examines how executive mobility shapes organizational status. Whereas previous work established the status-enhancing effect of hiring from a higher-status source firm on the status of the destination firm, we theorize that this effect is contingent on human- and social capital characteristics of the hired personnel. Human capital characteristics are measured based on tenure, specialization, and elite-university degrees. Social capital is measured by number of board seats. We test our hypotheses in the context of U.S. American accounting, consulting, and law- firms, covering mobility events of directors between 2012 and 2018 with a dataset of 1,169 firm- year observations. Results show that hiring events representing longer tenures and board interlocks will strengthen the positive effect of hiring from above-status tiers and subsequently improve the hiring firm ´s status. We contribute to our understanding of the mobility-status relationship by explaining differences in the perception of affiliations which influence, whether actors gain advantages from such affiliations.