Internal promotion or external recruitment: firm size and the choice of vacancy fulfillment in organizations
(2.School of Labor and Human Resources, Renmin University of China)
【Abstract】This paper focuses on the formative mechanism of the paradox with regard to choices made by employers while filling job vacancies. It aims to explain how firms can overcome the constraint of firm-specific human capital and the employees’ bargaining power, thus converting employment relationship from closeness to openness. We found that the constraint of firm-specific human capital as well as the bargaining power structure between the employers and employees determined the type of labor market within an organization, thus affecting the choice between internal promotion and external recruitment. On the other hand, the constraint of firm-specific human capital and bargaining power structure between employers and employees varies nonlinearly as the firm size increases.
【Keywords】 bargaining power; specific human capital; size; internal promotion; external recruitment;
. (1) Although the data are tracking survey data, the data between 2012 and 2013 are not tracking data, so the data used in this paper are still cross-sectional data. [^Back]
. (2) Thanks to anonymous experts for their suggestions on the selection of control variables. [^Back]
. (3) Gary Becker divided the corporate human capital into two types: firm-specific human capital and general human capital. He pointed out that employers’ investment in employee training was usually limited to the firm-specific human capital and would not pay for general human capital. [^Back]
. (4) Due to space limitations, if the control variables such as annual increase, and the industry have no special significance, the results of them are not reported, but are available upon request (E-mail: firstname.lastname@example.org). [^Back]
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