22
Mar
2022
Board Networks and the Reallocation of Labor
with Oskar Nordström Skans (Department of Economics, Uppsala University)
Luxembourg Institute of Socio-Economic Research (LISER)
Maison des Sciences Humaines
11, Porte des Sciences
L-4366 Esch-sur-Alzette / Belval
11:00 am
12:30 pm
For inquiries:
seminars@liser.lu

Abstract

We characterize each firm’s web of social connections to other firms  using data on directors and their family ties for all incorporated  firms in the Swedish economy.  We show that, at the aggregate level, director networks are linked to input-output tables and cross-industry patterns of job-to-job mobility.  We hypothesize that these networks help small firms accommodate positive and negative shocks through reallocation of labor across the connected firms.  Thus, director networks can provide small  firms with some of the flexibility that is inherent to large firms. In support of this hypothesis, we first show that labor flows between  newly connected firms increase precisely at the time a connection is established. These results closely resemble patterns we observe during the formation of formal business groups. We provide several empirical tests to discern if the flows are a part  of an efficient exchange and show how the networks help the firms manage idiosyncratic shocks.  Authors: Carlsson M, Gorschkov A Kramarz F and ON Skans.

Supported by the Luxembourg National Research Fund (RESCOM/2021/16537536)

Also in this category ...