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The Effect of Hiring Top Workers on Productivity: What is the Role of Absorptive Capacity?

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Abstract

We examine heterogeneous productivity effects of hiring top workers on small and medium-sized enterprises, using longitudinal employer-employee data. We find the productivity effect to be stronger for firms with higher absorptive capacity in terms of having a well-educated workforce, being in a knowledge-intensive industry or performing R&D. Technological laggards within an industry benefit more strongly from hiring top workers if their workforce is more well-educated.

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  • Lodefalk, Magnus & Tang, Aili, 2017. "The Effect of Hiring Top Workers on Productivity: What is the Role of Absorptive Capacity?," Working Papers 2017:2, Örebro University, School of Business.
    • Handle: RePEc:hhs:oruesi:2017_002
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    References listed on IDEAS

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    1. Gidehag, Anton & Lodefalk, Magnus, 2016. "Recruiting for Small Business Growth: Micro-level Evidence," Working Papers 2016:6, Örebro University, School of Business.
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    More about this item

    Keywords

    recruitment; knowledge spillover; firm growth; productivity; SME; absorptive capacity;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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