Costs of Job Rotation: Evidence from Mandatory Loan Officer Rotation

• 成果类型: Article
• 署名作者: Bhowal, Subhendu; Subramanian, Krishnamurthy; Tantri, Prasanna
• 署名单位: Massachusetts Institute of Technology (MIT); Indian School of Business (ISB)
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2020.3628
• 发表日期: 2021
• 页码: 2075-2095
• 关键词: agency costs; BANK; default; free-riding; INFORMATION; loan; rotation; teams

摘要

Job rotation inside an organization creates two conflicting effects. It disciplines agents by creating the fear that their successors may discover and report their hidden information. Thus, the agent takes actions that align with the principal's objective. However, job rotation can create a moral hazard problem. If information is soft and therefore, non-verifiable, the principal cannot attribute blame to the agent or the successor. Agents shirk, thereby hurting performance. Thus, the importance of disciplining versus moral hazard effects depends on the availability of hard information. Using unique loan-level data, we show that job rotation hinders performance when the information is soft.