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‘Job hopping’ by engineers and scientists is widely heralded as an important channel for knowledge spillovers within industries. Far less is known, however, about the actions firms take to reduce the outward flow of knowledge through markets for skilled labor. This study investigates the efficacy of a lever that has received little research attention: corporate reputations for toughness in patent enforcement. Drawing on unique data on enforcement activity, intra‐industry inventor mobility, and patent citations in the U.S. semiconductor industry, we find that a firm's litigiousness significantly reduces spillovers otherwise anticipated from departures of employee inventors, particularly when the hiring organizations are entrepreneurial ventures. Surprisingly, the deterrent effects of patent enforcement are similar in magnitude for firms located in California, a state characterized by open norms for knowledge trading, and firms headquartered in other U.S. states. The study sheds new light on the strategic actions firms use to prevent rivals from capturing value from their investments in human capital and research and development. Copyright © 2009 John Wiley & Sons, Ltd.

Much has been learned, and even more needs to be learned, about designing organizations and institutions. Since the 1960s this research has evolved from contingency to configuration, to complementarity, to complexity and creative theories of organizing. This chapter reviews these evolving theories (better called perspectives) and urges scholars to return to the frontier of organization studies by addressing an important new agenda in designing organizations with promising new research methods.

Our study examines the mediating effect of spin-out team characteristics on the relationship between founder quality and parent and spin-out performance. Since the ability to transfer or recreate complementary assets is a critical determinant of performance, we theorize and show that founders with greater ability impact both parent firm and spin-out performance by assembling teams that represent strong complementary human capital. Using linked employee-employer US Census data from the legal services industry, we find founding team size and tenure mediate the founder quality effect. Our findings have theoretical and practical implications for human resource strategies for both existing and entrepreneurial firms: the factor most salient to performance is not founder quality per se, but the manner in which it impacts the transfer and spillover of complementary human capital. Jelcodes:L84,-1 WHAT DO I TAKE WITH ME?: THE MEDIATING EFFECT OF SPIN-OUT TEAM SIZE AND TENURE ON THE FOUNDER-FIRM PERFORMANCE RELATIONSHIP "Not everyone can be a founder. We talk about the founders of startups and companies. We focus on the founders. The founders get press coverage. Sometimes they get rich. But for every founder, there is an early employee that takes near equal risks in joining an early-stage company." David Crow, StartupNorth (2009) Extant work on spin-outs-start-ups founded by a former employee of an established firm within the same industry-underscores the role of founders as conduits of knowledge from the parent firm to the new venture (Agarwal, Echambadi, Franco, & Sarkar, 2004; Franco & Filson, 2006; Klepper & Sleeper, 2005; Phillips, 2002). Moreover, work on entrepreneurship has focused on understanding which employees are most likely to leave and start entrepreneurial ventures; both Klepper and Thompson (2010) and Campbell, Ganco, Franco and Agarwal (2012) theorize why the best employees are the most likely to spin out. Not surprisingly, founder characteristics are also critical for firm performance: the departure of higher quality founders create greater adverse effects for the parent firm, and higher beneficial effects for the spin-out firm (Campbell et al., 2012; Klepper & Thompson, 2010; Phillips, 2002). The scholarly attention on founder characteristics is mirrored by the attention they receive in the popular press. Further, founders rarely venture out on their own (Wasserman, 2012), often turning to their colleagues to assemble a team (Wezel, Cattani, & Pennings, 2006; Groysberg, Nanda & Prats, 2009). For example, when Johnson and Johnson spun out in 1886 from Seabury and Johnson, all three members of the founding team and many of its first 14 employees came from the parent firm (Kilmer House, 2012). Walt Disney recruited Mickey Mouse co-creator Ub Iwerks, a fellow employee at Pesman-Rubin Commercial Art Studio, when founding Disney (Gabler, 2006). Similar accounts abound in the semiconductor industry, as exemplified by Gordon Moore and Robert Noyce hiring away Andrew Grove when leaving Fairchild Semiconductor to ...

Employee entrepreneurship and employee moves to rival firms (employee mobility) have both been recognized as critical drivers of the transfer of knowledge. Drawing on a unique database of intra‐industry inventor entrepreneurship and mobility events in the U.S. semiconductor industry, I examine the effect of the complexity of inventors' prior patenting activities on their decisions to join a rival firm or found a start‐up. The findings show that even though complexity inhibits knowledge diffusion to rival firms through employee mobility, complex knowledge may be underexploited within existing organizations and may still flow to startups through employee entrepreneurship. This study sheds new light on how technology shapes patterns of employee entrepreneurship and mobility, with implications for knowledge flows and competitive dynamics.

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