The Dark Side of Employee Mobility: Evidence from Enterprise Software Adoption

While most academics agree that information technology (IT) has a positive impact on firm performance, performance differences between firms due to IT investments are quite large. One way to increase firm productivity when adopting IT is to hire experienced people. However, using a data set that links firm level data with individual level data, we empirically find that hiring experienced people decreases the performance of the firm. This suggests that learned practices that have proved successful in the former firm do not necessarily fit into the new firm.