Michael Slavensky Dahl

My friend Guido Buenstorf is organizing the 6th European Meeting for Applied Evolutionary Economics (EMAEE) in Jena, Germany. The conference targets specifically the younger researcher in this field and is traditionally very successful.

EMAEE is an international conference focusing on young researchers (PhD students and post-docs). EMAEE provides a unique opportunity to discuss the latest insights and methods in applied evolutionary economics and innovation studies with top international scholars.

Evolutionary economics is a leading paradigm for research into innovation, organizations, and industrial dynamics. Beyond these fields, evolutionary economics provides a general approach to the study of emergent novelty and dynamic change in the economy. Plenary speakers at EMAEE 2009 will explore commonalities with the neighboring fields and disciplines – in particular behavioral economics, organization and management science, and historiography.

The conference will welcome among others Steven Klepper, Olav Sorenson, Sid Winter and Francesco Lissoni as keynote speakers. Deadline for abstracts is October, 31st, 2008. Check out the website for further details.

Michael S. Dahl and Steven Klepper

Using the matched employer-employee data set for Denmark and information on the founders of new firms, we analyze the hiring choices of all new firms that entered in 1995-2001. We develop a theoretical model in which the quality of a firm’s employees determines its average cost, a firm’s productivity is based on its pre-entry experience and persistent shocks, and over time firms learn about their productivity. The model predicts that more productive firms are larger and hire more talented employees, which gives rise to various predictions about how pre-entry experience, firm growth rates, and firm size influence the wages firms pay to their early hires. We find that beginning with the time of entry, larger firms consistently pay higher wages to their new hires. These are firms with greater survival prospects at the time of entry based on the pre-entry backgrounds of their founders and that grow at greater rates over time, both of which are predictive of the wages paid to new hires from the time of entry onward. Our findings suggest workers are allocated to firms according to their abilities, which can give rise to enduring firm capabilities.