Not in my Community: Social Pressure and the Geography of Dismissals

Eve Caroli, Giorgio Brunello and Andrea Bassanini

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Abstract: We investigate the impact of local social pressure on firms' firing decisions. Using linked employer-employee data, we show that secondary establishments located further away from headquarters have higher dismissal rates than those located closer. The effect of distance on dismissals is stronger, the greater the visibility of the firm in the local community of its headquarters and the larger the degree of selfishness of that community. We show that these findings can be explained by the social pressure exerted by the communities where firms' headquarters are located, which induces CEOs to refrain from dismissing at short distance from their headquarters.

Keywords: Dismissals; social pressure (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (21)

Published in Journal of Labor Economics, 2017, 35 (2), pp.429-483. ⟨10.1086/689285⟩

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Related works:
Journal Article: Not in My Community: Social Pressure and the Geography of Dismissals (2017)
Working Paper: Not in my Community: Social Pressure and the Geography of Dismissals (2017)
Working Paper: Not in my Community: Social Pressure and the Geography of Dismissals (2017)
Working Paper: Not in My Community: Social Pressure and the Geography of Dismissals (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01347254

DOI: 10.1086/689285

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