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The Effect of Learning by Hiring on Productivity

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Abstract

This work studies the phenomenon of inter- rm labor mobility as potential channel of knowledge transfer. Using data from the Danish employer-employee register, covering the period 1995-2005, it investigates how the knowledge embed- ded into recruited workers, coming from other rms, contributes to the process of knowledge di usion and boosts rms productivity. Speci cally, estimating both parametric (Cobb-Douglas) and semi-parametric production functions (Olley and Pakes, 1996; Levinsohn and Petrin, 2003), the impact of recruited technicians and highly educated workers on total factor productivity at the rm level is found to be signi cantly positive. A matching analysis, which allows for contin- uous treatment e ect evaluation (Hirano and Imbens, 2004), corroborates this nding.

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  • Parrotta, Pierpaolo & Pozzoli, Daio, 2009. "The Effect of Learning by Hiring on Productivity," Working Papers 09-11, University of Aarhus, Aarhus School of Business, Department of Economics.
    • Handle: RePEc:hhs:aareco:2009_011
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    File URL: http://www.hha.dk/nat/wper/09-11_pipadpozzoli.pdf
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    References listed on IDEAS

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    1. Stephen Bond & Måns Söderbom, 2005. "Adjustment Costs and the Identification of Cobb Douglas Production Functions," Economics Papers 2005-W04, Economics Group, Nuffield College, University of Oxford.
    2. Richard Blundell & Stephen Bond, 2000. "GMM Estimation with persistent panel data: an application to production functions," Econometric Reviews, Taylor & Francis Journals, vol. 19(3), pages 321-340.
    3. Wooldridge, Jeffrey M., 2009. "On estimating firm-level production functions using proxy variables to control for unobservables," Economics Letters, Elsevier, vol. 104(3), pages 112-114, September.
    4. Stephen Bond & Måns Söderbom, 2005. "Adjustment Costs and the Identification of Cobb Douglas Production Functions," Economics Series Working Papers 2005-W04, University of Oxford, Department of Economics.
    5. Amil Petrin & Brian P. Poi & James Levinsohn, 2004. "Production function estimation in Stata using inputs to control for unobservables," Stata Journal, StataCorp LP, vol. 4(2), pages 113-123, June.
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    More about this item

    Keywords

    Labour mobility; Total factor productivity; Generalized propensity score;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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