Does Firm-Specific Human Capital Decrease or Increase Employee Mobility?

41 Pages Posted: 11 Mar 2023

See all articles by Agnes Guenther

Agnes Guenther

University of Utah - Department of Entrepreneurship & Strategy

Jay B. Barney

University of Utah - David Eccles School of Business

Date Written: March 7, 2023

Abstract

An ongoing debate in the field of strategic human capital is whether high levels of firm- specific human capital decrease or increase employee mobility. Some argue that firm-specific human capital limits employment options, thus reducing mobility. Others argue that firm- specific human capital, because it signals an employees’ willingness and ability to make such investments, is broadly valuable and increases mobility. Empirical findings using tenure as a measure of firm-specific human capital provide mixed results. Addressing the puzzle, this paper suggests that whether firm-specific human capital decreases or increases employee mobility depends on the extent to which an employee’s current firm relies on team production to generate economic value. Analysis of linked employer-employee data on 1,024 R&D workers in acquired firms provides support for this idea. Implications for human capital theory are discussed.

Keywords: Firm-specific human capital, strategic human capital, employee mobility, team production, tenure

JEL Classification: J24, J63, J20, M50

Suggested Citation

Guenther, Agnes and Barney, Jay B., Does Firm-Specific Human Capital Decrease or Increase Employee Mobility? (March 7, 2023). Available at SSRN: https://ssrn.com/abstract=4381552 or http://dx.doi.org/10.2139/ssrn.4381552

Agnes Guenther (Contact Author)

University of Utah - Department of Entrepreneurship & Strategy ( email )

1655 East Campus Center Dr.
Salt Lake City, UT 84112
United States

Jay B. Barney

University of Utah - David Eccles School of Business ( email )

1645 E Campus Center Dr
Salt Lake City, UT 84112-9303
United States

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