Big Fish in Small Ponds: Human Capital Migration and the Rise of Boutique Banks

• 成果类型: Article
• 署名作者: Gao, Janet; Wang, Wenyu; Yu, Xiaoyun
• 署名单位: Georgetown University; Indiana University System; IU Kelley School of Business; Indiana University Bloomington; Shanghai Jiao Tong University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2021.03829
• 发表日期: 2024
• 关键词: investment bank; mobility of human capital; Mergers and Acquisitions; organizational friction

摘要

We study the comparative advantage of firms with focused and multidivisional organizational forms at attracting valuable human capital. Using the merger and acquisition (M&A) advisory industry as a laboratory, we show that high-performing individuals are more likely to migrate to boutique (focused) banks, especially those who are still on the upward trajectory of their career. Such migration is amplified by the cross-subsidization inside bulge bracket (multidivisional) firms, proxied by poor performance of their nonM&A departments. The transition of skilled labor improves the performance of the boutique sector, potentially contributing to the rise of boutiques over the past two decades. Moreover, M&A deal outcomes differ when having boutique advisors. Our findings suggest that corporate organizational structure and labor migration can jointly shape industry dynamics.