Reputations for toughness in patent enforcement: implications for knowledge spillovers via inventor mobility

Abstract

‘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.

The determinants of firms' PhD recruitment to undertake R&D activities

“…They were chosen according to the literature which analyses the mobility of researchers to firms consistent with the different levels of analysis (Agarwal, Ganco, & Ziedonis, 2009;Auriol, 2010;Beltramo et al, 2001;Cruz-Castro & Sanz-Menéndez, 2005;Garcia-Quevedo et al, 2012;Herrera et al, 2010) 2 . In order to reduce the risk of a reverse causality we have included lags in the different explanatory variables and re-estimated the model using the restrictive sample.…”

Attributes of Angel and Crowdfunded Investments as Determinants of VC Screening Decisions

“…Because of the rigor of attaining quality members and past group-level success, the reputations of angel groups "spill over" onto their group members in the same way the reputation of an organization can spill over onto affiliated entities (either positively or negatively) (Agarwal, Ganco, & Ziedonis, 2009;Dollinger, Golden, & Saxton, 1997). Concretely, membership in a successful angel organization is likely to cast its members in a positive light, further adding to the reputation of the individual angel investor.…”

Theories of the Firm–Market Boundary

“…High-powered incentives lure the necessary and desired new talent. A wide range of literature on entrepreneurial entry (e.g., Agarwal, Ganco, & Ziedonis, 2009;Wu & Knott, 2006) and the migration of talent in response to high-powered incentives (e.g., Hamilton, 2000;Zenger, 1994; also see Agarwal, Campbell, Franco, & Ganco, 2011;Elfenbein, Hamilton, & Zenger, 2010) speak to this phenomenon empirically.…”