Premium
EXTERNAL RECRUITMENT AND INTRAFIRM MOBILITY
Author(s) -
CHAN WILLIAM
Publication year - 2006
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1093/ei/cbj009
Subject(s) - contest , incentive , hierarchy , corporation , economics , promotion (chess) , competition (biology) , position (finance) , work (physics) , microeconomics , labour economics , finance , market economy , politics , political science , engineering , mechanical engineering , ecology , law , biology
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. (JEL J00 , J41 )