External Recruitment and Intrafirm Mobility
AbstractIn Chan (1996), I suggest that a contest between internal and external candidates for a position within a firm is generally biased in favor of the former to maintain work incentive for existing workers. This implies that a successful external candidate tends to be superior in ability relative to internally promoted colleagues and therefore enjoys a higher probability of subsequent promotion. Moreover, this effect tends to diminish up the hierarchy if external competition is more of a threat at lower job levels. Analyzing personnel data from a U.S. financial corporation, I find consistent support for this hypothesis. (JEL J00, J41) Copyright 2006, Oxford University Press.
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Bibliographic InfoArticle provided by Western Economic Association International in its journal Economic Inquiry.
Volume (Year): 44 (2006)
Issue (Month): 1 (January)
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Find related papers by JEL classification:
- J00 - Labor and Demographic Economics - - General - - - General
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
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- Acosta, Pablo, 2010. "Promotion dynamics the Peter Principle: Incumbents vs. external hires," Labour Economics, Elsevier, vol. 17(6), pages 975-986, December.
- Waldman, Michael, 2013. "Classic promotion tournaments versus market-based tournaments," International Journal of Industrial Organization, Elsevier, vol. 31(3), pages 198-210.
- Christian Pfeifer, 2011. "Handicaps in Job Assignment: Insiders, Outsiders and Gender," Journal of Labor Research, Springer, vol. 32(1), pages 1-20, March.
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