Firm failure and managerial labor markets evidence from Texas banking

Albert A. Cannella, Donald R. Fraser, D. Scott Lee

Research output: Contribution to journalArticlepeer-review

101 Scopus citations


We study the managerial labor market's ability to discriminate between good and bad managerial performance. Using a sample of failed and nonfailed Texas banks, we find that the context of job loss affects the manager's ability to regain comparable employment. Managers associated with banks that failed for reasons arguably beyond the managers' control were twice as likely to regain comparable banking posts as managers at other failed banks. We also detect a relation between the probability of post-failure reemployment and a manager's rank within the firm and to proxies for managerial self-dealing and competence.

Original languageEnglish (US)
Pages (from-to)185-210
Number of pages26
JournalJournal of Financial Economics
Issue number2
StatePublished - Jun 1995


  • Financial distress
  • Management turnover
  • Managerial labor markets
  • Relative-performance evaluation

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics
  • Strategy and Management


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