The Effects of Knowledge Spillovers through Labor Mobility

Castillo, Victoria and Figal-Garone, Lucas and Maffioli, Alessandro and Rojo, Sofia and Stucchi, Rodolfo (2016): The Effects of Knowledge Spillovers through Labor Mobility.

Abstract

We estimate the effects of knowledge spillovers on firms’ performance and workers’ wages. We use an innovation support program as an exogenous shock to the knowledge of non-participant firms and an employer-employee dataset to track the mobility of workers—and knowledge diffusion—between firms. We find that non-participants that acquired new knowledge by hiring skilled workers exposed to the program increased employment, the average wage they pay, exports, and productivity. Finally, we find that—depending on the level of competition—a wage premium was paid either by participant or non-participant firms to retain or acquire workers.

• Item Type: MPRA Paper
• Language: English
• Keywords: Knowledge spillover, Labor mobility, Innovation, Panel data
• Subjects: D - Microeconomics > D2 - Production and Organizations; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O38 - Government Policy

References

Aghion, P. & Howitt, P. (1992). A model of growth through creative destruction. Econometrica 60(2), 323-351.

Aitken, B. & A. Harrison. (1999). Do domestic firms benefit from direct foreign investment? Evidence from Venezuela. The American Economic Review 89(3), 605-618.

Almeida, P. & B. Kogut. (1999). Localization of knowledge and the mobility of engineers in regional networks. Management Science 45(7), 905-917.

Angrist, J. & Pischke, J.-S. (2008). Mostly harmless econometrics: an empiricist’s companion. Princeton: Princeton University Press.

Anselin, L., Varga, A. & Acs, Z. (1997). Local geographic spillovers between university research and high technology innovations. Journal of Urban Economics 42(3), 422-448.

Arrow, K. J. (1962). The economic implications of learning by doing. The Review of Economic Studies 29(3), 155-173.

Audretsch, D. B. & Feldman, M. P. (1996). R&D spillovers and the geography of innovation and production. The American Economic Review 86(3), 630-640.

Aw, B. Y., Chung, S. & Roberts, M. (2000). Productivity and turnover in the export market: Micro-level evidence from the Republic of Korea and Taiwan (China). World Bank Economic Review 14(1), 65-90.

Baily, M. N., Hulten, C. & Campbell, D. (1992). Productivity dynamics in manufacturing plants. Brookings Papers on Economic Activity. Microeconomics, 187-267.

Balsvik, R. (2011). Is labor mobility a channel for spillovers from multinationals? Evidence from Norwegian manufacturing. The Review of Economics and Statistics 93(1), 285-297.

Bernard, A. & Jensen, J. (1999). Exceptional exporter performance: Cause, effect, or both? Journal of International Economics 47(1), 1-25.

Bernard, A. & Jensen, B. (2004). Why some firms export? The Review of Economics and Statistics 86(4), 561-569.

Bernard, A., Eaton, J., Jensen, J. & Kortum, S. (2003). Plants and productivity in international trade. The American Economic Review 93(4), 1268-1290.

Bernstein, J. L. & Nadiri, M. I. (1989). Research and development and intraindustry spillovers: an empirical application of dynamic duality. The Review of Economic Studies 56(2), 249-267.

Binelli, C. & A. Maffioli. (2007). A Micro-econometric Analysis of Public Support to Private R&D in Argentina. International Review of Applied Economics 21(3), 339-359.

Bonte, W. (2008). Inter-firm trust in buyer–supplier relations: Are knowledge spillovers and geographical proximity relevant? Journal of Economic Behavior and Organization 67(3-4), 855- 870.

Boschma, R., Eriksson, R. & Lindgren, U. (2009). How does labour mobility affect the performance of plants? The importance of relatedness and geographical proximity. Journal of Economic Geography 9(2), 169-190.

Chudnovsky, D., López, A., Rossi, M & Ubfal, D. (2006). Evaluating a program of public funding of private innovation activities. An econometric study of FONTAR in Argentina. OVE Working Papers Nro. 1606, Inter-American Development Bank.

Clerides, S., Lack, S. & Tybout, J.R. (1998). Is learning by exporting important? Micro-dynamic evidence from Colombia, Mexico and Morocco. The Quarterly Journal of Economics 113(3), 903-947.

Cooper, D. (2001). Innovation and reciprocal externalities: information transmission via job mobility. Journal of Economic Behavior and Organization 45(4), 403-425.

Crespi, G., Maffioli, A. & Rasteletti, A. (2014). Investing in ideas: policies to foster innovation, in G. Crespi, E. Fernandez-Arias & E. Stein (Eds.), Rethinking productive development: sound policies and institutions for economic transformation (pp. 61-106). New York: Palgrave Macmillan.

Fosfuri, A. & Rønde, T. (2004). High-tech clusters, technology spillovers, and trade secret laws. International Journal of Industrial Organization 22(1), 45-65.

Fosfuri, A., Motta, M. & Rønde, T. (2001). Foreign direct investments and spillovers through workers’ mobility. Journal of International Economics 53(1), 205-222.

Foster, L., Haltiwanger, J. & Krizan, C. J. (2001). Aggregate productivity growth: lessons from microeconomic evidence. In E. Dean, M. Harper, & C. Hulten (Eds.), New Development in Productivity Analysis (pp. 303-363). Chicago: University of Chicago Press.

Foster, L., Haltiwanger, J. & Syverson, C. (2008). Reallocation, firm turnover, and efficiency: selection on productivity or profitability? The American Economic Review 98(1), 394-425.

Geroski, P. A. (1995). Do spillovers undermine the incentive to innovate? In S. Dowrick (Ed.), Economic Approaches to Innovation (pp. 76–97). Aldershot, UK: Edward Elgar.

Gilbert, B. A., McDougall, P. P. & Audretsch, D. B. (2008). Clusters, knowledge spillovers and new venture performance: an empirical examination. Journal of Business Venturing 23(4), 405-422.

Görg, H. & Strobl, E. (2005). Spillovers from foreign firms through worker mobility: An empirical investigation. The Scandinavian Journal of Economics 107(4), 693-709.

Grossman, G. M. & Helpman, E. (1991a). Innovation and growth in the global economy. Cambridge MA: MIT Press.

Grossman, G. M. & Helpman, E. (1991b). Quality ladders in the theory of growth. The Review of Economic Studies 58(1), 43-61.

Hall, B. H. & Maffioli, A. (2008). Evaluating the impact of technology development funds in emerging economies: evidence from Latin America. European Journal of Development Research 20(2), 172-198.

Hall, B. H. & Lerner, J. (2010). The financing of R&D and innovation. In B. H. Hall & N. Rosenberg (Eds.), Handbook of the Economics of Innovation (pp. 609-639). Elsevier-North Holland.

Hay, D. & Morris, D. (1987). Industrial economics, theory and evidence. Oxford: Oxford University Press.

Henderson, R. M., Jaffe, A. & Trajtenberg, M. (1993). Geographic localization of knowledge spillovers as evidenced by patent citations. The Quarterly Journal of Economics 108(3), 578-598.

Jaffe, A. (1986). Technological opportunity and spillovers of R&D: Evidence from firms’ patents, profits, and market value. The American Economic Review 76(5), 984-1001.

Javorcik, B. S. (2004). Does foreign direct investment increase the productivity of domestic firms? In search of spillovers through backward linkages. The American Economic Review 94(3), 605-627.

Jones, C. I. (2005). Growth and ideas. In P. Aghion & S. Durlauf (Eds.), Handbook of economic growth (pp. 1063–1111). Amsterdam: Elsevier.

Kim, J. & Marschke, G. (2005). Labor mobility of scientists, technological diffusion, and the firm’s patenting decision. RAND Journal of Economics 36(2), 298-317.

Malchow-Moller, N., Markusen, J. R. & Schjerning, B. (2007). Foreign firms, domestic wages. National Bureau of Economic Research Working Paper 13001.

Maliranta, M., Mohnen, P. & Rouvinen, P. (2009). Is inter-firm labor mobility a channel of knowledge spillovers? Evidence from a linked employer-employee panel. Industrial and Corporate Change 18(6), 1161-1191.

Manski, C. F. (1993). Identification of endogenous social effects: the reflection problem. The Review of Economic Studies 60(3), 531-542.

Maskell, P. & Malmberg, A. (1999). Localised learning and industrial competitiveness. Cambridge Journal of Economics 23(2), 167-185.

Melitz, M. (2003). The impact of trade on intra-industry reallocations and aggregate industry productivity. Econometrica 71(6), 1695-1725.

Møen, J. (2005). Is mobility of technical personnel a source of R&D spillovers? Journal of Labor Economics 23(1), 81-114.

Møen, J. (2007). R&D spillovers from subsidized firms that fail: Tracing knowledge by following employees across firms. Research Policy 36(9), 1143-1464.

Murata, Y., Nakajima, R. & Okamoto, R. (2014). Localized knowledge spillovers and patent citations: a distance-based approach. The Review of Economics and Statistics 96(5), 967-985.

Nelson, R. R. (1959). The simple economics of basic scientific research. Journal of Political Economy 67(3), 297-306.

Poole, J. P. (2013). Knowledge transfers from multinational to domestic firms: evidence from worker mobility. The Review of Economics and Statistics 95(2), 393-406.

Power, D. & Lundmark, M. (2004). Working through knowledge pools: Labour market dynamics, the transference of knowledge and ideas, and industrial clusters. Urban Studies 41(5-6), 1025-1044.

Parente, S. & Prescott, E. (1994). Barriers to technology adoption and development. Journal of Political Economy 102(2), 298-321.

Rao, H. & Drazin, R. (2002). Overcoming resource constraints on product innovation by recruiting talent from rivals: a study of the mutual fund industry, 1986–94. Academy of Management Journal 45(3), 491-507.

Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy 98(5), S71-S102.

Stephan, P. E. (1996). The economics of science. Journal of Economic Literature 34(3), 1199-1235.

Stoyanov, A. & Zubanov, N. (2012). Productivity spillovers across firms through worker mobility. American Economic Journal: Applied Economics 4(2), 168-198.

Syverson, C. (2011). What determines productivity? Journal of Economic Literature 49(2), 326-65.

Thompson, P. & Fox-Kean, M. (2005). Patent citations and the geography of knowledge spillovers: a reassessment. The American Economic Review 95(1), 450-460.

Tirole, J. (1988). The theory of industrial organization. Cambridge, MA: MIT Press.

Wooldridge, J. M. (2002). Econometric analysis of cross section and panel data. Cambridge, MA: MIT Press.