Scandinavian Working Papers in Economics
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School of Business, Örebro University Working Papers, School of Business, Örebro University

No 2017:2:
The Effect of Hiring Top Workers on Productivity: What is the Role of Absorptive Capacity?

Magnus Lodefalk () and Aili Tang ()

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.

Keywords: recruitment; knowledge spillover; firm growth; productivity; SME; absorptive capacity; (follow links to similar papers)

JEL-Codes: D22; D24; D83; J24; J62; (follow links to similar papers)

12 pages, March 24, 2017

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