FIRM FAILURE AND MANAGERIAL LABOR-MARKETS - EVIDENCE FROM TEXAS BANKING

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