Employee External Affiliation and Inter-firm Mobility: Evidence from Swedish Microdata

How does having an external affiliation influence the probability of employee inter-firm mobility? Our review of the literature suggests that it is difficult to predict ex-ante whether holding an external affiliation increases or decreases inter-firm mobility due to the presence of competing arguments related to the benefits of employment flexibility against agency costs. In the absence of a clear direction for prediction, we conduct an exploratory analysis on administrative labor market data from Sweden during 2002–2010. Specifically, we examine the effects of a few contingencies that are prominent in the study of employment and organizations, namely, organizational age, size, and employment tenure. We find that holding an external organizational affiliation reduces inter-firm mobility among younger and smaller organizations, and for recent hires; yet it increases inter-firm mobility for other organizations and employees. We discuss the implications of our work for future research.