Agency-specific human capital drives down turnover intention in our estimates. The availability of outside options has the opposite effect except in cases where the executive has invested a lot in agency-specific human capital.
The presence of options is always a tricky issue. On one hand, having more options can cause turnover. Yet, how do people know about the presence of exit options? Usually “B players” don’t look at their outside options, so they don’t leave (causing a “loyalty penalty”). How do people become aware of their options? They might as a result of some level of organizational dissatisfaction that causes them to examine their outside markets.
Having options may cause turnover, but knowledge of the presence of those options results from a search process, which is itself caused by some level of dissatisfaction (or in some cases, caused by having a job that causes people search as part of the work itself).