Learning-by-hiring: How do rival firms learn from focal firm's hiring

Abstract

Previous studies provide evidence of learning from the mobility of scientists for the source and the hiring firms. However, we have a limited understanding of the competitive implications of such inter-firm mobility and associated learnings. Using a difference–in–difference approach on matched patents in the semiconductor industry in 1981–2010, we find that mobile scientists' patents receive more citations from rival firms after the mobility vis-a-vis before the mobility and vis-a-vis other similar patents. We conclude that rival firms respond to mobilities across other firms by attributing more attention to mobile scientists. Furthermore, the context of the mobility can determine the extent of response from rival firms. Rival firms are more likely to build on a mobile scientist's patents after mobility when the mobility occurs between technologically distant firms, the source firm or the hiring firm has low research experience, or the mobile scientist has considerable experience.