Assistant Professor of Strategy
Firm Induced Migration; Smaller Towns; Talent; Human Capital; Employee Mobility; Geographic Mobility; Migration; Clusters
Firm-induced migration typically entails firms relocating workers to fill value-creating positions at destination locations. But such relocated workers are often exposed to external employment opportunities at their destinations, possibly triggering turnover. The authors conceptualize the firm-induced migration path, consisting of the relocated workers’ place of origin and destination, as relevant in determining worker performance and turnover postrelocation.Using a unique data set from a large Indian technology firm that hires talent from both large cities and smaller towns, the authors document robust econometric patterns by exploiting the firm’s randomized assignment of workers to production centers across the country. These production centers are located in the largest technology cluster in India (Bangalore), smaller technology clusters, and noncluster locations.The authors find that the firm-induced migration path shapes both worker performance and turnover. Compared with workers from large cities, workers from smaller towns achieve higher performance when relocated to Bangalore than to other production centers, but are also more likely to join competing firms.Fine-grained data on employment and human-capital-augmentation opportunities at workers’ destination locations, and on socioeconomic conditions in workers’ places of origin, help the authors rule in an abductive explanation: across firm-induced migration paths, differences in external labor-market opportunities between workers’ places of origin and their destinations, as well as intrafirm skill-development opportunities at the destination, are related to heterogeneous human-capital outcomes.