Hiring Opportunities following MNC Closures: Can Young Firms Attract Former MNC Professionals?

Wolfgang Sofka, Pedro de Faria, Miguel Torres Preto

Research output: Contribution to conferencePaperResearchpeer-review


Access to skilled human capital is crucial for successful entrepreneurship. We study how the closure of MNC subsidiaries affects the probability with which MNC professionals move to young domestic firms. Under ordinary conditions, young firms are disadvantaged in attracting professionals from MNCs. We reason that MNC subsidiary closures change this calculus. We integrate theoretical mechanisms from international business literature into models from strategic human capital theory explaining matches between particular employees with particular firms. We predict that MNC professionals will be more likely to join young domestic firms following closure. We reason that the effect is stronger for MNC professionals who are predisposed through prior entrepreneurial experience, when the closure affects many employees and few employment opportunities with other MNCs exist. We test and support these hypotheses using a balanced sample of 61,159 MNC professionals. Our findings have relevance for both academic research as well as practice.
Original languageEnglish
Publication date2018
Number of pages40
Publication statusPublished - 2018
EventDRUID18 Conference - Copenhagen Business School, Frederiksberg, Denmark
Duration: 11 Jun 201813 Jun 2018
Conference number: 40


ConferenceDRUID18 Conference
LocationCopenhagen Business School
Internet address


  • MNC subsidiaries
  • Closure
  • Strategic human capital
  • Young firms

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