Firm Choice and Career Success — Theory and Evidence

37 Pages Posted: 11 Jan 2019 Last revised: 21 Apr 2020

See all articles by Christian Deutscher

Christian Deutscher

Bielefeld University

Marc Gürtler

University of Braunschweig - Institute of Technology, Department of Finance

Oliver Gürtler

University of Cologne

Jed DeVaro

California State University, East Bay

Date Written: December 27, 2018

Abstract

We investigate how the decision of workers to join a specific type of firm affects their future career opportunities. Workers can either join a very competitive firm (big pond) or a less competitive one (small pond). In a big pond, it is more difficult to advance, but the potential rewards are higher. We determine a separating equilibrium in which only workers who are confident in their ability join big ponds, implying that the average abilities of new entrants are higher in big ponds than in small ponds. In an empirical analysis with data from professional soccer, we support all the implications from our theoretical model.

Keywords: Firm choice, big and small pond, career, self-selection, signaling, learning

JEL Classification: D82, D83, J62, M51

Suggested Citation

Deutscher, Christian and Gürtler, Marc and Gürtler, Oliver and DeVaro, Jed, Firm Choice and Career Success — Theory and Evidence (December 27, 2018). Available at SSRN: https://ssrn.com/abstract=3307195 or http://dx.doi.org/10.2139/ssrn.3307195

Christian Deutscher

Bielefeld University ( email )

Universitätsstraße 25
Bielefeld, NRW 33613
Germany

Marc Gürtler

University of Braunschweig - Institute of Technology, Department of Finance ( email )

Abt-Jerusalem-Str. 7
Braunschweig, 38106
Germany

Oliver Gürtler (Contact Author)

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

Jed DeVaro

California State University, East Bay ( email )

25800 Carlos Bee Boulevard
Hayward, CA California 94542
United States
1(510)885-3289 (Phone)

HOME PAGE: http://www2.cbe.csueastbay.edu/fac_page/final/index.php?id=308

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