Knowledge spillovers through inventor mobility: the effect on firm-level patenting

Labor mobility is heralded as a key channel of knowledge spillovers between firms. However, the empirical evidence on labor mobility's effects on firm performance leaves many unanswered questions. In this paper, we analyze the effect of inventor mobility on firm-level patenting activity by studying a sample of European R&D investing firms. Especially, the characteristics of mobile inventors and their previous employers are analyzed to discover the prerequisites of successful knowledge transfer. The empirical results suggest that mobile patent inventors transfer knowledge and affect the hiring firm's future innovation performance. Inventor mobility in general does not significantly increase patenting; however, hiring inventors with several prior patents and different kinds of technological expertise contributes to firms' future patenting. Furthermore, hiring inventors from actively patenting firms contributes to future patenting. We also find that outbound mobility of inventors weakens the source firm's patenting performance, especially when the firm loses inventors who have been highly productive, have worked in the firm's core field of technology or move to technologically similar firms.