Is Mobility of Technical Personnel a Source of R&D Spillovers?

Abstract

Labor mobility is often considered to be an important source of knowledge externalities, making it difficult for firms to appropriate returns to R&D investments. In this paper, I argue that inter-firm transfers of knowledge embodied in people should be analyzed within a human capital framework. Testing such a framework using a matched employer-employee data set, I find that the technical staff in R&D-intensive firms pays for the knowledge they accumulate on the job through lower wages in the beginning of their career. Later they earn a return on these implicit investments through higher wages. This suggests that the potential externalities associated with labor mobility, at least to some extent, are internalized in the labor market.

Intrapreneurship or entrepreneurship?

“…embedded organizational skills), it is less obvious which aspects of speci…c human capital are truly speci…c to the …rms they are acquired in. Indeed, several theories of independent spino¤s argue that 'speci…c'human capital is actually more transferable outside the …rm than it …rst appears (Helfat and Lieberman 2002;Møen 2005).…”

“…Managers wishing to discourage employees from quitting to found potentially competing start-ups might seek to 'buy them o¤' with higher salaries, which helps retain both the employee and the innovation within the …rm (Møen 2005;Subramanian 2005;Hvide and Kristiansen 2007;Hvide 2009). More generally, it has been argued that even when employers lack complementary assets and property rights, they can still design compensation contracts which successfully retain employees with valuable new ideas within the …rm (Pakes and Nitzan 1983;Anton and Yao 1994;Møen 2005). For these reasons, I propose the next hypothesis:…”

The knowledge spillover theory of entrepreneurship

“…For the time period we are investigating , this implies a rapid accumulation of knowledge stock in the first 10 years (up to 1991) followed by more stable development where change in the knowledge stock is determined by annual outlays on R&D. Obviously, this can insert biases into the estimations. We have therefore chosen to approximate knowledge stocks over the entire period with annual R&D flows, 19 The efficiency with which incumbents exploit knowledge is, in part, related to the incentive structure and intellectual property rights of the firm (Moen 2005;Hellmann 2007;Hvide 2006). 20 The choice of empirical model is based on an F-test to check the validity of using a fixed-effect regression technique as compared to OLS.…”

“…8 Hellmann (2007), Lazear (2005), Hvide (2006) and Anton and Yao (1994) proposed models to examine conditions under which agents pursue entrepreneurial activity by starting rival enterprises. Most of this literature addressed incentives where potential externalities could be internalized (Moen 2005), while some have examined circumstances under which employees take advantage of intellectual human capital (L E ) through start-ups (Bhide 7 Knowledge spillovers operate more strongly in some parts of the economy than in others. Particular characteristics tend to be associated with locations with high density of opportunities, such as those hosting high-tech industries.…”

Knowledge Spillover Agents and Regional Development

“…There seems to be a widespread consensus that also spillovers constitute an important type of and specific channel for knowledge transfer and that these externalities have a positive impact on innovation and growth ( Tödtling et al 2006). The mobility of highly skilled personnel (or the transfer of human capital) represents another core mechanism for the spilling over of (embodied) knowledge ( Arrow 1959;Matusik and Hill 1998;Argote and Ingram 2000;Rosenkopf and Almeida 2003;Moen 2005;Döring and Schnellenbach 2006).…”