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Knowledge diffusion through employee mobility

Author

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  • Darren Filson
  • April Franco

Abstract

In high-tech industries, one important method of diffusion is through employee mobility: many of the entering firms are started by employees from incumbent firms using some of their former employers? technological know-how. This paper explores the effect of incorporating this mechanism in a general industry framework by allowing employees to imitate their employers? know-how. The equilibrium is Pareto optimal since the employees ?pay? for the possibility of learning their employers? know-how. The model?s implications are consistent with data from the rigid disk drive industry. These implications concern the effects of know-how on firm formation and survival.

Suggested Citation

  • Darren Filson & April Franco, 2000. "Knowledge diffusion through employee mobility," Staff Report 272, Federal Reserve Bank of Minneapolis.
    • Handle: RePEc:fip:fedmsr:272
    DOI: 10.21034/sr.272
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    References listed on IDEAS

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