We develop and test a model of the patenting and R&D decisions of an innovating firm whose scientist-employees sometimes quit to join or start a rival. In our model, the innovating firm patents to protect itself from its employees. We show theoretically that the risk of a scientist's departure reduces the firm's R&D expenditures and raises its propensity to patent an innovation. We find evidence from firm-level panel data that is consistent with this latter result. Our results suggest that scientists' turnover is associated with cross-industry patenting variation and with recent economy-wide increases in patenting. Scientists' turnover may also partly account for why small firms have high patent-R&D ratios. Ordering information: This article can be ordered from https://pubs3.rand.org/cgi-bin/rje/pdf.cgi.
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Volume (Year): 36 (2005) Issue (Month): 2 (Summer) Pages: 298-317 Download reference. The following formats are available: HTML
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Find related papers by JEL classification: D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
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Hvide, Hans K. & Kristiansen, Eirik G., 2006.
"Management of Knowledge Workers,"
Discussion Papers
2006/7, Department of Finance and Management Science, Norwegian School of Economics and Business Administration.
[Downloadable!]
Other versions:
Ulrich Kaiser & Hans Christian Kongsted & Thomas Rønde, 2008.
"Labor Mobility and Patenting Activity,"
CAM Working Papers
2008-07, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
[Downloadable!]