New Hires, Adjustment Costs, and Knowledge Transfer - Evidence from the Mobility of Entrepreneurs and Skills on Firm Productivity

Emma Lappi*

*Corresponding author for this work

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Abstract

This paper evaluates the productivity impacts and the subsequent adjustment costs associated with hiring different knowledge workers. I focus on the difference between hiring former entrepreneurs, employees who change jobs, and unemployed individuals. I am the first to evaluate the direct impact that hiring former entrepreneurs has on firm productivity and the heterogenous adjustment costs associated with the different types of new hires. I find no difference between the first-year adjustment costs of entrepreneurs and those of regular-wage employees. Hiring former entrepreneurs is a way to increase productivity after the first year of employment only if the former entrepreneurs are from the highest end of the ability distribution.
Original languageEnglish
Article numberdtad032
JournalIndustrial and Corporate Change
Volume33
Issue number3
Pages (from-to)712-737
Number of pages26
ISSN0960-6491
DOIs
Publication statusPublished - Jun 2024

Bibliographical note

Published online: 1 July 2023.

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