Who Leaves, Where to, and Why Worry? Employee Mobility, Employee Entrepreneurship, and Effects on Source Firm Performance

46 Pages Posted: 13 Oct 2009

See all articles by Benjamin A. Campbell

Benjamin A. Campbell

The Ohio State University - Fisher College of Business

Martin Ganco

University of Wisconsin - Madison - Department of Management and Human Resources

April Franco

University of Toronto - Rotman School of Management; University of Toronto at Scarborough - Division of Management

Rajshree Agarwal

University of Maryland - Robert H. Smith School of Business

Date Written: September 1, 2009

Abstract

We theorize that differences in human assets’ ability to generate value are linked to exit decisions and their effects on firm performance. Using linked employee-employer data from the U.S. Census Bureau on legal services, we find that employees with higher earnings are less likely to leave relative to employees with lower earnings, but if they do leave, they are more likely to move to a spin-out instead of an incumbent firm. Employee entrepreneurship has a larger adverse impact on source firm performance than moves to established firms, even controlling for observable employee quality. Findings suggest that the transfer of human capital, complementary assets, and opportunities all affect mobility decisions and their impact on source firms.

Suggested Citation

Campbell, Benjamin A. and Ganco, Martin and Franco, April and Agarwal, Rajshree, Who Leaves, Where to, and Why Worry? Employee Mobility, Employee Entrepreneurship, and Effects on Source Firm Performance (September 1, 2009). US Census Bureau Center for Economic Studies Paper No. 09-32. Available at SSRN: https://ssrn.com/abstract=1484926 or http://dx.doi.org/10.2139/ssrn.1484926

Benjamin A. Campbell

The Ohio State University - Fisher College of Business ( email )

2100 Neil Avenue
Columbus, OH 43210-1144
United States

Martin Ganco

University of Wisconsin - Madison - Department of Management and Human Resources ( email )

Madison, WI
United States

April Franco

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

University of Toronto at Scarborough - Division of Management ( email )

1265 Military Trial
Scarborough, Ontario M1C 1A4
Canada

Rajshree Agarwal (Contact Author)

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States

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