The Microeconometrics Seminar: Every Tuesday
Time: 12:15 pm – 13:15 pm
Date: 24th of November 2020
by visio
Bérengère PATAULT ( CREST ) – “How valuable are business networks? Evidence from sales managers in international markets”

Abstract: Finding new buyers is crucial for firms to expand their business. This paper analyzes the role of labor mobility as a mechanism for acquiring buyers from rival firms. We focus on one type of worker likely to build ties with buyers – sales managers – and one type of buyer – foreign partners. Combining French firm-to-firm trade data with matched employer-employee data, we carry out an event-study analysis that exploits the timing of sales-managers’ transitions from one firm to another for identification. We find that recruiting a sales manager increases significantly the probability to start selling to the buyers of her former firm. Having interacted with a buyer in the past multiplies the probability that the new recruit sell to this buyer in the future by a factor of 11. This business-network transmission comes at the expense of the buyer’s former suppliers and, in particular, the sales manager’s former employer. Yet, business stealing is only partial, which leads to job-to-job transitions not being zero-sum. The investigation of mechanisms reveals that sales managers accumulate buyer-specific connections, beyond country- and sector-specific knowledge.

 
Organizers:

Benoît SCHMUTZ (Laboratoire de Microéconométrie-CREST)
Anthony STRITTMATTER (Laboratoire de Microéconométrie-CREST)
Sponsors:
CREST