Different people, different pathways: Human capital redeployment in multi-business firms

Abstract

Multi-business firms redeploy human capital to strengthen individual business units. However, we know little about the antecedents of such redeployments and their effects on unit outcomes. Contributing to the resource redeployment and strategic human capital literatures, we test the relationships between parent–unit industry relatedness, the direction of redeployment (parent-to-unit and unit-to-parent), the type of human capital, the likelihood of redeployment, and post-redeployment unit closure. Using Norwegian population-level microdata of spinouts, we find that parent–unit industry relatedness increases the likelihood of human capital redeployment and that this effect is stronger for generalists than for specialists. Further, we find that parent-to-unit and unit-to-parent redeployment of generalists and specialists have distinct effects on unit closure, largely because of differences in post-redeployment unit performance.