Essays on Firm Strategy and Human Capital

A fundamental source of firms’ competitive advantage is human capi-tal—the knowledge, abilities and skills embedded in employees. Human capital is different to many other resources critical to firm performance in-asmuch as it is has a limited capacity and cannot be possessed by a firm. These characteristics create several challenges for firms. Human capital needs to be allocated to specific tasks, functions, and locations. Moreover, human capital is mobile and often lost with the departure of employees. Although much is known about human capital, too little is known about the reallocation of human capital within firms, the human capital mobility out of firms, and the value human capital provides to firms. This disserta-tion addresses these questions by examining how changes in the firm con-text affect the reconfiguration, mobility, and value of human capital. Thereby, it advances our understanding of the dependence of firm com-petitive advantage on human capital, and contributes to the broader strate-gy and entrepreneurship literatures. The dissertation consists of three self-contained chapters. Chapter 1 provides a comprehensive model of human capital reconfiguration after acquisitions, specifically focusing on managers as a key type of human cap-ital in acquisitions and to reconfiguration decisions in general. Chapter 1 shows increases in managerial reconfiguration activities between and within firm units immediately after the acquisition, underlining the importance of both acquirer- and target-specific knowledge. The findings suggest that re-configuration may help mitigate strategic dilemmas faced in acquisitions. Chapter 2 examines the mobility of R&D workers embedded in teams after acquisitions. The results show that team diversity reduces employee mobility. This effect is reduced for R&D workers with the more general human capital. The findings suggest that who leaves post-acquisition is largely pre-determined prior to the acquisition by the employees’ human capital specifically, which depends on their team embeddedness and their individual characteristics. Chapter 3 studies the well-established relationship between industry experience and new ventures success, and the mechanism underlying it. Although commonly suggested in the literature, the observed patterns question industry-specific knowledge as causal mechanism underlying the re-lationship. Mobility is suggested as a more plausible mechanism. Chapter 3 also suggests that other human capital characteristics, such as firm-specificity, may capture different mechanisms than often believed.