| dc.description.abstract | This study examines the influence of executives’ prior employment ties on unrelated acquisitions. I do this by considering the relational ties created by both the oft-studied board interlock as well as the hitherto unconsidered executive prior employment. By considering both tie types, I am able to examine the new inter-firm relational tie variable next to a well-established relational network variable. Therefore, I collected data on all of the executive prior employment ties and board interlocks to unrelated industries for all of the public, U.S. firms in the ‘computers and office equipment’ industry from 2002-2014. Results show that a relational tie to an unrelated industry through either a board interlock or executive prior employment does increase the likelihood of acquiring an unrelated target in that same industry, although the latter has a stronger influence. The rate of decay of the prior employment tie is assessed and found to be quite slow. The amount of time spent building ties with co-workers in the unrelated industry has no impact on the effect, suggesting that most prior employment ties are strong enough for knowledge transfer. Finally, the surprising result that sent executive prior employment ties possess comparable influence to their received counterparts, is outlined, meaning that an executive exiting to another industry can be just as influential on a firm’s acquisition activity in that industry as the firm recruiting an executive from that industry. | en |
