The impact of reputation capital on the career paths of departing employees

This paper examines the impact of corporate reputation capital on employees' career progression in the case of inter‐organizational transitions. A proprietary database that contains career history data on professionals, managers and executives in the financial services industry is used to test the hypotheses. The paper finds that reputation capital is most strongly determined by organization size, not operational efficiency. Reputation capital is an important predictor of the size of the promotions that employees receive as they change organizations, and may signal underlying individual capabilities and performance. Further, employees are willing to forgo a promotion in order to be able to join organizations with high reputation capital.