The Effect of Executive Migration and Spin-offs on Incumbent Firms

Pernille Gjerløv-Juel, Michael S. Dahl

Research output: Contribution to conference without publisher/journalPaper without publisher/journalResearchpeer-review

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Abstract

If spin-offs are founded on intellectual capital accumulated at the parent firms, they could be potentially harmful to those firms. However, similar effects on parent firms' performance could be expected for executive migration to rivals. Exploiting a comprehensive Danish linked employer-employee database, we investigate how spin-off and executive migration to rivals affect parent firms' hazard of exit, sales growth and employment growth. We find negative performance effects from executive migration independent on where employees go to. While departures of top employees to found spin-offs have negative effects on parent firm performance, the effect
from key-employees who resign to competing incumbent firms is even greater. All effects decrease over time, but parent firms recover faster from spin-off migration. We study this using different methods, including matched models adjusting for parent firm heterogeneity.
Original languageEnglish
Publication date2010
Number of pages45
Publication statusPublished - 2010
Event13th Conference of the International Schumpeter Society on Innovation, Organization, Sustainability and Crisis - Aalborg, Denmark
Duration: 21 Jun 201024 Jun 2010

Conference

Conference13th Conference of the International Schumpeter Society on Innovation, Organization, Sustainability and Crisis
CountryDenmark
CityAalborg
Period21/06/201024/06/2010

Keywords

    Cite this

    Gjerløv-Juel, P., & Dahl, M. S. (2010). The Effect of Executive Migration and Spin-offs on Incumbent Firms. Paper presented at 13th Conference of the International Schumpeter Society on Innovation, Organization, Sustainability and Crisis, Aalborg, Denmark.
    Gjerløv-Juel, Pernille ; Dahl, Michael S. / The Effect of Executive Migration and Spin-offs on Incumbent Firms. Paper presented at 13th Conference of the International Schumpeter Society on Innovation, Organization, Sustainability and Crisis, Aalborg, Denmark.45 p.
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    Gjerløv-Juel, P & Dahl, MS 2010, 'The Effect of Executive Migration and Spin-offs on Incumbent Firms' Paper presented at, Aalborg, Denmark, 21/06/2010 - 24/06/2010, .

    The Effect of Executive Migration and Spin-offs on Incumbent Firms. / Gjerløv-Juel, Pernille; Dahl, Michael S.

    2010. Paper presented at 13th Conference of the International Schumpeter Society on Innovation, Organization, Sustainability and Crisis, Aalborg, Denmark.

    Research output: Contribution to conference without publisher/journalPaper without publisher/journalResearchpeer-review

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    T1 - The Effect of Executive Migration and Spin-offs on Incumbent Firms

    AU - Gjerløv-Juel, Pernille

    AU - Dahl, Michael S.

    PY - 2010

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    N2 - If spin-offs are founded on intellectual capital accumulated at the parent firms, they could be potentially harmful to those firms. However, similar effects on parent firms' performance could be expected for executive migration to rivals. Exploiting a comprehensive Danish linked employer-employee database, we investigate how spin-off and executive migration to rivals affect parent firms' hazard of exit, sales growth and employment growth. We find negative performance effects from executive migration independent on where employees go to. While departures of top employees to found spin-offs have negative effects on parent firm performance, the effect from key-employees who resign to competing incumbent firms is even greater. All effects decrease over time, but parent firms recover faster from spin-off migration. We study this using different methods, including matched models adjusting for parent firm heterogeneity.

    AB - If spin-offs are founded on intellectual capital accumulated at the parent firms, they could be potentially harmful to those firms. However, similar effects on parent firms' performance could be expected for executive migration to rivals. Exploiting a comprehensive Danish linked employer-employee database, we investigate how spin-off and executive migration to rivals affect parent firms' hazard of exit, sales growth and employment growth. We find negative performance effects from executive migration independent on where employees go to. While departures of top employees to found spin-offs have negative effects on parent firm performance, the effect from key-employees who resign to competing incumbent firms is even greater. All effects decrease over time, but parent firms recover faster from spin-off migration. We study this using different methods, including matched models adjusting for parent firm heterogeneity.

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    KW - Top employees

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    Gjerløv-Juel P, Dahl MS. The Effect of Executive Migration and Spin-offs on Incumbent Firms. 2010. Paper presented at 13th Conference of the International Schumpeter Society on Innovation, Organization, Sustainability and Crisis, Aalborg, Denmark.