Scandinavian Working Papers in Economics

Working Papers,
Örebro University, School of Business

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

Magnus Lodefalk () and Aili Tang ()
Additional contact information
Magnus Lodefalk: Örebro University School of Business, Postal: Örebro University, School of Business, SE - 701 82 ÖREBRO, Sweden
Aili Tang: Örebro University School of Business, Postal: Örebro University, School of Business, SE - 701 82 ÖREBRO, Sweden

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

JEL-codes: D22; D24; D83; J24; J62

12 pages, March 24, 2017

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