High-Performer Mobility to Entrepreneurship and Parent-Firm Performance

We investigate the effect of high-performer employee mobility to same-industry startups on parent-firm performance. High-performer mobility induces a loss of human assets but might also enable competition by transferring human and complementary assets from the parent firm to a competitor. Only when such transfer occurs is mobility to same-industry startups more harmful than other types of high-performer mobility. Human and complementary asset transfer is conditional on the departing high performer’s ability to accumulate (and hence transfer) knowledge from the parent firm and the recipient firm’s ability to absorb such knowledge. In support of this hypothesis, we show that the high performer’s tenure and the startup’s resources (size) moderate the performance effect of high-performer mobility on same-industry startups.