Entrepreneurial teams' acquisition of talent: a two-sided approach
January 2016
Working Paper Number:
CES-16-45
Abstract
While it is crucial for startups to hire high human capital employees, little is known about what drives the hiring decisions. Considering the stakes for both startups and their hires (i.e., joiners), we examine the phenomenon using a two-sided matching model that explicitly reveals the preferences of each side. We apply the model to a sample of startups from five technological manufacturing industries while examining a range of variables grounded in prior work on startup human capital. The analysis is based on the Longitudinal Employer Household dynamics from the U.S. Census Bureau. Our findings indicate that, in the context of entrepreneurship, both startups and joiners rely heavily on signals of quality. Further, quality considerations that are important for the match play a minimal role in determining earnings. Our approach refines our understanding of how entrepreneurial human capital evolves.
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endogeneity,
payroll,
earnings,
employee,
employ,
employed,
entrepreneurial,
startup,
entrepreneur,
entrepreneurship,
labor,
bias,
hiring,
hire,
matching,
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Longitudinal Business Database,
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Alfred P Sloan Foundation,
Longitudinal Employer Household Dynamics,
Kauffman Foundation,
International Trade Research Report
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