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Human Capital, Firm Capabilities, and Innovation

Author

Listed:
  • Ajay Bhaskarbhatla

    (Erasmus School of Economics, ERIM)

  • Luis Cabral

    (New York University)

  • Deepak Hegde

    (New York University)

  • Thomas (T.L.P.R.) Peeters

    (Erasmus School of Economics, ERIM; Tinbergen Institute, The Netherlands)

Abstract

In this study, we decompose the contributions of employeesÕ human capital and firmsÕ capabilities for innovation using a 37-year panel of U.S. patenting activity. We estimate that inventorsÕ human capital is 5-10 times more important than firm capabilities for explaining the variance in inventor output. We then examine matching between inventors and firms and find highly productive inventors are attracted to firms that (i) have weak firm-specific invention capabilities, and (ii) employ other talented inventors. A theoretical model that incorporates worker preferences for inventive output rationalizes our empirical findings of negative assortative matching between inventors and firms, and positive assortative matching among inventors.

Suggested Citation

  • Ajay Bhaskarbhatla & Luis Cabral & Deepak Hegde & Thomas (T.L.P.R.) Peeters, 2017. "Human Capital, Firm Capabilities, and Innovation," Tinbergen Institute Discussion Papers 17-115/VII, Tinbergen Institute, revised 03 Mar 2020.
    • Handle: RePEc:tin:wpaper:20170115
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    File URL: https://papers.tinbergen.nl/17115.pdf
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    References listed on IDEAS

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    1. Nagler, Markus & Sorg, Stefan, 2019. "The Disciplinary Effect of Post-Grant Review," Rationality and Competition Discussion Paper Series 155, CRC TRR 190 Rationality and Competition.
    2. Nagler, Markus & Sorg, Stefan, 2020. "The disciplinary effect of post-grant review – Causal evidence from European patent opposition," Research Policy, Elsevier, vol. 49(3).

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    More about this item

    Keywords

    Human Capital; Capabilities; Innovation; Matching; Competitive Advantage;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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