Collaborations that hurt firm performance but help employees' careers

When a firm and a competitor collaborate with the same partner, they compete for the shared partner's resources and attention. Such“peer competition”has been shown to negatively affect a firm's access to resources and its performance.One might expect that also the employees’ careers to suffer as a result. However, we argue that the firm's employees benefit from such collaborations. They lever-age these collaborations to build social capital—helping their mobility and careers. We find empirical support for our theory using a large sample data set of video game companies. Our study points to an important yet hitherto neglected agency conflict: employees seek interfirm collaborations that benefit them person-ally but hurt their firm.