Lori Rosenkopf, Management, The Wharton School, and Gina Dokko, Management, UC Davis Graduate School of Management
Abstract: The movement of personnel between firms has been shown to have important implications for firms, yet there has been little direct investigation of the underlying mechanisms. We propose that in addition to their human capital, mobile individuals carry social capital, affecting the outcomes of the firms they join and leave by altering the patterns of interaction between firms. In this study, we examine how job mobility affects firm influence in a technical standards setting committee for U.S. wireless telecommunications. We hypothesize and find that hiring individuals who are richer in social capital increases firm influence in technical standards setting committees by increasing the hiring firm’s social capital. We also find the benefits of hiring social capital are attenuated when an interfirm relationship is maintained by multiple individuals. In contrast, we find that the loss of personnel does not affect a firm’s social capital or influence over standards directly but that it does have an effect on firm social capital and influence contingent on changes in the firm’s business strategy. In advancing these arguments, we address the broader question of individuals as carriers of social capital and the conditions under which interpersonal connections are appropriable by firms.