Homeward Bound: How Private Utility Is Tied to Value Creation and Capture
Employee Inter- and Intra-Firm Mobility
ISBN: 978-1-78973-550-5, eISBN: 978-1-78973-549-9
Publication date: 15 July 2020
Abstract
In the context of worker–firm complementarities, the extant literature has focused primarily on worker–firm dyads that generate additional revenue for the firm. However, we extend the study of worker–firm complementarities by examining matches that create value through the generation of additional nonpecuniary utility for employees. Through this lens, we hypothesize that mobile employees will receive lower wages to offset the benefits they receive from these nonpecuniary complementarities. Further, we hypothesize that star employees who create unique revenue-generating complementarities receive higher wages than otherwise predicted as they can capture a share of the additional revenue they generate. We test this conceptualization using panel data on all US National Basketball Association players from 2000 to 2009. We demonstrate that NBA players accept lower than predicted wages to play for their home teams which reflects worker utility-generating complementarities. We also show that superstars receive higher than predicted wages to play for their home teams, consistent with firm revenue-generating complementarities.
Acknowledgements
Acknowledgments
We gratefully acknowledge the helpful and constructive feedback received from Rebecca Kehoe and John Mawdsley. We also benefitted from comments and feedback received on various versions of this manuscript from participants at the BYU-Utah winter strategy conference, the Copenhagen SMS mini-conference, the Academy of Management Annual Meetings, the Atlanta Competitive Advantage Conference, the Ohio State Human Capital Conference, and the University of Minnesota. We also appreciate friendly reviews and feedback from Jeff Dyer, Seth Carnahan, and Daniel Olson.
Citation
Kryscynski, D., Coff, R., Campbell, B.A. and Mallory, B. (2020), "Homeward Bound: How Private Utility Is Tied to Value Creation and Capture", Tzabbar, D. and Cirillo, B. (Ed.) Employee Inter- and Intra-Firm Mobility (Advances in Strategic Management, Vol. 41), Emerald Publishing Limited, Leeds, pp. 271-288. https://doi.org/10.1108/S0742-332220200000041018
Publisher
:Emerald Publishing Limited
Copyright © 2020 Emerald Publishing Limited