External Recruitment and Intrafirm Mobility
William M. Chan
University of Hong Kong - School of Economics and Finance
Economic Inquiry, Vol. 44, No. 1, pp. 169-184, 2006
In 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.
Number of Pages in PDF File: 16
JEL Classification: J00, J41Accepted Paper Series
Date posted: June 5, 2006
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