CREAT: Census Research Exploration and Analysis Tool

DO LOCAL MANAGERS GIVE LABOR AN EDGE?

April 2013

Written by: Scott E. Yonker

Working Paper Number:

CES-13-16

Abstract

Based on the psychological theory of place attachments, native local managers should be more rooted in their communities than non-locals and should act accordingly. Consistent with this, local managers are 33% less likely to lay of employees than their non-local industry peers following industry distress. Additionally, when managers are forced to lay off employees, establishments near managers' homes are less likely to experience layoffs than those located elsewhere. Locals pay for these higher employment levels by spending cash, cutting investment, and selling assets. While there is no direct evidence that labor-friendly policies of locals have a differential impact on firm performance or value, only locals with weaker incentives implement these policies, suggesting that favoritism by locals may be suboptimal. Taken together these results suggest that managerial preferences impact corporate employment decisions.

Document Tags and Keywords

Keywords Keywords are automatically generated using KeyBERT, a powerful and innovative keyword extraction tool that utilizes BERT embeddings to ensure high-quality and contextually relevant keywords.

By analyzing the content of working papers, KeyBERT identifies terms and phrases that capture the essence of the text, highlighting the most significant topics and trends. This approach not only enhances searchability but provides connections that go beyond potentially domain-specific author-defined keywords.
:
executive, manager, employee, employ, employed, job, establishment, rural, workforce, employing, geographically, urban, town, layoff, neighborhood, resident

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:
Standard Industrial Classification, Center for Economic Studies, Longitudinal Business Database, Center for Research in Security Prices, Economic Census

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