Review of Financial Studies 2026

Directing the Labor Market: Shared Directors and Employee Flows

Taylor A. Begley¹; Peter H. Haslag²; Daniel Weagley³

¹ University of Kentucky · ² University of Tennessee, Vanderbilt University , · ³ University of Tennessee

Abstract

Using résumé data on over 20 million U.S. workers, we find that the flow of employees between a pair of firms sharply drops by about 20% during periods in which the firms share a board director. This relationship is stronger in settings where firms have greater potential gains from limiting worker mobility and is most pronounced for higher-skilled employees. Moreover, we find more connected firms have lower rates of internal promotion and no improvements in employee satisfaction. The evidence is consistent with shared directors serving as a mechanism for labor market coordination.

DOI

10.1093/rfs/hhag090

Language

en

Sources

crossref openalex

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