The challenge to solo entrepreneurs to double their workforce is the single biggest growth event facing any growing firm. We analyze Danish matched employer-employee data. Those who hire enjoy superior sales outcomes in subsequent years, while the dispersion in profits increases. Furthermore, those that hire enjoy faster sales growth in the previous year, suggesting that sales growth Granger-causes the first hire. Finally, we show that founders with a stronger profile in terms of education and previous employment and income are more likely to increase profits while the characteristics of the employee are less important.
Coad, Alex; Nielsen, Kristian; and Timmermans, Bram
"MY FIRST EMPLOYEE,"
Frontiers of Entrepreneurship Research: Vol. 34
, Article 2.
Available at: http://digitalknowledge.babson.edu/fer/vol34/iss6/2