Abstract

This article aims to shed light on SMEs employing high-skilled individuals with a background in academia and the impact of these employees on firm performance. We assume that hiring individuals previously employed by universities brings in human and social capital that can enhance performance and foster firm growth. We use linked employer-employee data from the German labor market statistics to identify SMEs that hire high-skilled individuals directly from a university and analyze the development of the SMEs in terms of employment growth after hiring as well as the composition of the workforce in terms of skill level. We find a significantly larger effect in SMEs that hired a former university employee compared to their statistical twins that hired a high-skilled individual with a professional background outside of academia.