Pooling Managerial Talents: A Study of Executive Sharing in Korean Business Groups

Abstract

Internal sharing of managerial talents is a prevalent practice of human resource management in an organization arrangement of business groups. We examine whether a business group-affiliated firm creates value by pooling managerial talents from other member firms. Investigating senior managers’ career profiles in Korean business groups, we find that a group-affiliated firm’s proportion of executives who have experienced across multiple member firms through their careers has a positive effect on the firm performance. We specify firm-level and economy-wide conditions under which this positive effect can be salient.