The Credibility of Social Climbing: When Does Inter-Firm Mobility [Not] Influence Organizational Status?

This paper examines when inter-firm mobility influences organizational status. Whereas a low-status firm can accumulate prestigious affiliations by hiring from a high-status firm, the status distance between these firms may influence whether the mobility event is perceived as credible. If the mobility event lacks credibility, meaning that market participants believe that the employee moved for a reason other than the new employer’s quality, then the hiring firm is less likely to improve its status position. We also explore this effect’s symmetry and find that a high-status firm is less likely to experience status decline when the mobility event lacks credibility. We assess these hypotheses in the context of the inter-firm mobility of partners of the subsidiary offices of international law firms in Hong Kong from 1998 to 2008.