TY - JOUR
T1 - Early employment expansion and long-run survival
T2 - Examining employee turnover as a context factor
AU - Gjerløv-Juel, Pernille
AU - Guenther, Christina
PY - 2019/1/19
Y1 - 2019/1/19
N2 - We investigate under which circumstances early employment growth translates into greater long-run survival. Drawing on Penrose's growth theory, we suggest that the relationship between early employment growth and long-run survival is conditional on employee turnover. We argue that higher employee turnover reduces joint experience in the firm and disrupts the development and eventual exploitation of the firm's productive opportunity set, thereby reducing long-term utilization of early employment expansion. These arguments suggest that the firm's ability to realize long-term benefits of early employment growth is contingent upon low employee turnover following this initial expansion. Using the Danish Integrated Database for Labor Market Research, we show that only when employee turnover is low, will early employment growth lead to higher survival in the long run.
AB - We investigate under which circumstances early employment growth translates into greater long-run survival. Drawing on Penrose's growth theory, we suggest that the relationship between early employment growth and long-run survival is conditional on employee turnover. We argue that higher employee turnover reduces joint experience in the firm and disrupts the development and eventual exploitation of the firm's productive opportunity set, thereby reducing long-term utilization of early employment expansion. These arguments suggest that the firm's ability to realize long-term benefits of early employment growth is contingent upon low employee turnover following this initial expansion. Using the Danish Integrated Database for Labor Market Research, we show that only when employee turnover is low, will early employment growth lead to higher survival in the long run.
KW - Employees
KW - Growth
KW - New ventures
KW - Survival
KW - Turnover
UR - http://www.scopus.com/inward/record.url?scp=85048539292&partnerID=8YFLogxK
U2 - 10.1016/j.jbusvent.2018.05.005
DO - 10.1016/j.jbusvent.2018.05.005
M3 - Journal article
SN - 0883-9026
VL - 34
SP - 80
EP - 102
JO - Journal of Business Venturing
JF - Journal of Business Venturing
IS - 1
ER -