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  • January 2023
  • Article
  • Management Science

Firm-Induced Migration Paths and Strategic Human-Capital Outcomes

By: Prithwiraj (Raj) Choudhury, Tarun Khanna and Victoria Sevcenko
  • Format:Print
  • | Pages:27
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Abstract

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. We conceptualize the firm-induced migration path, consisting of the relocated workers’ place of origin and destination, as relevant in determining worker performance and post-relocation turnover. Using a unique dataset from a large Indian technology firm that hires talent from both large cities and smaller towns, we 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 non-cluster locations. We find that the firm-induced migration path shapes both worker performance and turnover. Compared to 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 us 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.

Keywords

Worker Relocation; Turnover; Firm-induced Migration; Smaller Towns; Employee Mobility; Geographic Mobility; Migration; Clusters; Employees; Geographic Location; Performance; Opportunities; Retention; Human Capital; Talent and Talent Management

Citation

Choudhury, Prithwiraj (Raj), Tarun Khanna, and Victoria Sevcenko. "Firm-Induced Migration Paths and Strategic Human-Capital Outcomes." Management Science 69, no. 1 (January 2023): 419–445.
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About The Authors

Prithwiraj Choudhury

Technology and Operations Management
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Tarun Khanna

Strategy
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  • Aramco: Navigating the Energy Transition By: Tarun Khanna and Samir Junnarkar
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  • Gavi and the 'Next' Pandemic By: Tarun Khanna and Samir Junnarkar
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