Abstract This article shows that former investment bankers become important clients for their previous employers and also provide access to profitable business opportunities to their new private equity employers through their previous employment networks. I observe 1,326 individuals directly involved in 1,285 transactions, of whom a large majority have changed their occupation from financial advisor to private equity professional. The social networks arising from these labor market movements affect private equity firms’ choices of financial advisors, as well as the sourcing, pricing, and performance of deals.

We study whether and how politicians can influence the behaviour of CEOs and firm performance with prestigious government awards. We present a simple model to develop the hypothesis that government awards have a negative effect on firm performance. The empirical analysis uses two legal reforms in New Zealand for identification: knighthoods and damehoods were abolished in April 2000 and reinstated in March 2009. The findings are consistent with the predictions of the model. The results suggest that government awards serve as an incentive tool through which politicians influence firms in favour of employees to the detriment of shareholders.