Startup Acquisitions as a Hiring Strategy: Worker Choice and Turnover


Event details

Date and time 20.05.2021 17:00  
Place and room
Speaker Danny Kim (Wharton School, University of Pennsylvania)
Category Conferences - Seminars
Danny Kim (Wharton School, University of Pennsylvania)
"Startup Acquisitions as a Hiring Strategy: Worker Choice and Turnover"
Discussant: Russ Coff (University of Wisconsin-Madison - Wisconsin School of Business)

This study examines the phenomenon of hiring through startup acquisitions (“acqui-hiring”) relative to traditional hiring. A key distinction is that unlike regular hires who choose their new employer, acquired workers do not have a voice in the decision to be acquired. While prior research shows that job-related shocks can induce turnover, the unexpected nature of the employer transition may further elevate acquired workers’ likelihood of departure. Using population-level data from US Census, I find that acquired workers exhibit significantly greater rates of turnover than regular hires. Moreover, turnover rates rise with the distance between the acquirer and target, especially when acquirers integrate the target firm – a decision that amplifies the job-related shock by requiring employee relocation. In contrast, providing autonomy alleviates the post-acquisition turnover effects.

EPFL Virtual Innovation Seminar
EVIS is a bi-weekly virtual seminar series focusing on Science, Technology and Innovation topics studied through the lens of Economics, Entrepreneurship, Strategy and Finance.