Does inertia pay off? Empirical assessment of an evolutionary-ecological model of human capital decisions at firm level

Abstract

This paper empirically assesses the validity of a model which combines organisational ecology and evolutionary theory to analyse human capital accumulation decisions at firm level. The main argument of the model is that factors underlying the process of plants’ reproduction, especially the process of fission, must be isolated and related to the economic motivations of employers to hire top educated and highly skilled people. Inert behaviour in human capital accumulation decisions stands here as a rational outcome. Logistic estimates, based on the whole population of plants of the Portuguese textiles, provide statistical evidence corroborating the fission hypothesis. This evidence constitutes a critical examination of the mainstream economics concerning the demand side of human capital.