Founder affiliations: jobseeker reactions and impact on employee recruitment by start-up ventures

Seung Hoon D. Chung () and Simon C. Parker ()
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Seung Hoon D. Chung: California State University
Simon C. Parker: Western University

Small Business Economics, 2023, vol. 61, issue 1, No 11, 259-283

Abstract: Abstract Many entrepreneurs face challenges in hiring employees, in part because of information asymmetries between start-ups and jobseekers. This paper argues that the prestigious organizational affiliations of founders act as signals that can convey two distinct unobservable attributes: (1) founder-related attributes and (2) venture-related attributes. We perform a series of randomized controlled experiments with respondents who are searching for jobs or will do so in the near future. Our results show that a founder’s affiliations with prestigious organizations make a start-up venture more attractive to jobseekers, and that they do so by signaling founder-related attributes rather than venture quality. Furthermore, we also find that the effects of prestigious founder affiliations are likely to be particularly strong when recruiting jobseekers straight out of universities.

Keywords: Entrepreneurship; Recruitment; Joiners; Signaling theory; Experiment (search for similar items in EconPapers)
JEL-codes: C91 D82 J24 M13 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11187-022-00694-7

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