Talent Discovery and Poaching under Asymmetric Information

Talent Discovery and Poaching under Asymmetric Information

Daniel Ferreira, Radoslawa Nikolowa

Series number :

Serial Number: 
621/2019

Date posted :

August 27 2019

Last revised :

July 23 2020
SSRN Share

Keywords

  • Financial-Sector Labor Markets • 
  • adverse selection • 
  • Poaching

We develop a model of the market for knowledge workers in which talent is discovered on the job. In the model, asymmetric information and firm-specific human capital combine to generate several predictions relating firm heterogeneity to talent discovery and poaching.

We show that high-quality (i.e., large and high-productivity) firms are more likely to become talent poachers, while lower quality firms are more likely to invest in talent discovery. Job-to-job flows are adversely selected, which implies that internally promoted managers are more productive than those who are externally promoted. The model generates several additional predictions linking firm heterogeneity to the distribution of managerial talent, productivity, compensation, and promotions.

Published in

Published in: 
Publication Title: 
The Economic Journal, Volume 133, Issue 649, January 2023, Pages 201–234
Description: 
https://doi.org/10.1093/ej/ueac048
Date: 
Tuesday, August 23, 2022

Authors

Real name:
Radoslawa Nikolowa