vera rocha

Abstract

Human capital resource (HCR) emergence theory describes the conditions conducive for the creation of firm-level value from individual employees’ aggregate contributions. However, it offers little insight on how firms’ hiring practices may shape HCRs differentially capable of emergent outcomes. Drawing on prior work addressing labor market imperfections, we argue that hiring practices focusing on incumbent employees’ prior affiliations allow firms to more effectively identify good fits that create complementarities capable of HCR emergence and competitive advantage. Specifically, we examine pipeline hiring practices in young firms – particularly fertile contexts for emergent processes – and theorize that pipelines create better employee-firm matches and revive complementary resources created in prior organizations for use in fledgling resource-constrained firms. Using a sample of 148,249 hires in 8,312 young firms with methods accounting for endogeneity and sample selection biases, we find robust support that individual pipeline hires earn more, exert more influence, and are retained longer than non-affiliated hires. Further, our results provide evidence of emergence, as firms that use pipeline hiring practices create more value (revenue), capture more value (profit), and survive longer.