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Recruiting for Ideas: How Firms Exploit the Prior Inventions of New Hires

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Author Info

  • Jasjit Singh

    ()
    (INSEAD, Singapore 138676)

  • Ajay Agrawal

    ()
    (Rotman School of Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada; and National Bureau of Economic Research, Cambridge, Massachusetts 02138)

Abstract

When firms recruit inventors, they acquire not only the use of their skills but also enhanced access to their stock of ideas. But do hiring firms actually increase their use of new recruits' prior inventions? Our estimates suggest they do, quite significantly in fact, by approximately 219% on average. However, this does not necessarily reflect widespread "learning by hiring." In fact, we estimate that a recruit's exploitation of her own prior ideas accounts for almost half of the above effect, with much of the diffusion to others being limited to the recruit's immediate collaborative network. Furthermore, although one might expect the recruit's role to diminish rapidly as her tacit knowledge diffuses across her new firm, our estimates indicate that her importance is surprisingly persistent over time. We base these findings on an empirical strategy that exploits the variation over time in hiring firms' citations to the recruits' premove patents. Specifically, we employ a difference-in-differences approach to compare premove versus postmove citation rates for the recruits' prior patents and corresponding matched-pair control patents. Our methodology has three benefits compared to previous studies that also examine the link between labor mobility and knowledge flow: (1) it does not suffer from the upward bias inherent in the conventional cross-sectional comparison, (2) it generates results that are robust to a more stringently matched control sample, and (3) it enables a temporal examination of knowledge flow patterns. This paper was accepted by Kamalini Ramdas, entrepreneurship and innovation.

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File URL: http://dx.doi.org/10.1287/mnsc.1100.1253
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Bibliographic Info

Article provided by INFORMS in its journal Management Science.

Volume (Year): 57 (2011)
Issue (Month): 1 (January)
Pages: 129-150

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Handle: RePEc:inm:ormnsc:v:57:y:2011:i:1:p:129-150

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Related research

Keywords: inventor mobility; access to ideas; knowledge spillovers; learning by hiring; difference in differences; coarsened exact matching; collaborative networks; patent citations;

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. “Recruiting for Ideas: How Firms Exploit the Prior Inventions of New Hires,” J. Singh & A. Agrawal (2011)
    by afinetheorem in A Fine Theorem on 2013-02-28 08:42:43
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Cited by:
  1. Rosina Moreno & Ernest Miguélez, 2011. "A relational approach to the geography of innovation: a typology of regions," IREA Working Papers 201121, University of Barcelona, Research Institute of Applied Economics, revised Oct 2011.
  2. Asheim, Bjørn & M. Bugge, Markus & Coenen, Lars & Herstad, Sverre, 2013. "What Does Evolutionary Economic Geography Bring To The Policy Table? Reconceptualising regional innovation systems," CIRCLE Electronic Working Papers 2013/5, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
  3. Pierre Azoulay & Joshua S. Graff Zivin & Bhaven N. Sampat, 2011. "The Diffusion of Scientific Knowledge Across Time and Space: Evidence from Professional Transitions for the Superstars of Medicine," NBER Working Papers 16683, National Bureau of Economic Research, Inc.
  4. Ralf R. Meisenzahl & Joel Mokyr, 2011. "The Rate and Direction of Invention in the British Industrial Revolution: Incentives and Institutions," NBER Chapters, in: The Rate and Direction of Inventive Activity Revisited, pages 443-479 National Bureau of Economic Research, Inc.
  5. Michael Roach & Wesley M. Cohen, 2012. "Lens or Prism? Patent Citations as a Measure of Knowledge Flows from Public Research," NBER Working Papers 18292, National Bureau of Economic Research, Inc.
  6. Ralf Meisenzahl & Joel Mokyr, 2011. "The Rate and Direction of Invention in the British Industrial Revolution: Incentives and Institutions," NBER Working Papers 16993, National Bureau of Economic Research, Inc.
  7. Ejsing, Ann-Kathrine & Kaiser, Ulrich & Kongsted, Hans Christian & Laursen, Keld, 2013. "The Role of University Scientist Mobility for Industrial Innovation," IZA Discussion Papers 7470, Institute for the Study of Labor (IZA).
  8. Ernest Miguélez & Rosina Moreno, 2013. "“Mobility, networks and innovation: The role of regions’ absorptive capacity”," AQR Working Papers 201308, University of Barcelona, Regional Quantitative Analysis Group, revised Oct 2013.
  9. Stoyanov, Andrey & Zubanov, Nikolay, 2013. "Money on the Table? Firms' and Workers' Gains from Productivity Spillovers through Worker Mobility," IZA Discussion Papers 7702, Institute for the Study of Labor (IZA).
  10. Riccardo Crescenzi, 2014. "The evolving dialogue between Innovation and Economic Geography. From physical distance to non-spatial proximities and 'integrated' frameworks," Papers in Evolutionary Economic Geography (PEEG) 1408, Utrecht University, Section of Economic Geography, revised Mar 2014.
  11. Harhoff, Dietmar, 2012. "What are the Channels for Technology Sourcing? Panel Data Evidence from German Companies," Discussion Papers in Business Administration 14327, University of Munich, Munich School of Management.
  12. Dietmar Harhoff & Elisabeth Mueller & John Van Reenen, 2013. "What are the channels for technology sourcing? Panel data evidence from German companies," LSE Research Online Documents on Economics 51524, London School of Economics and Political Science, LSE Library.

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