Labor Mobility Foster Innovation?
Evidence from Sweden
Pontus Braunerhjelm, Ding Ding and Per Thulin
Royal Institute of Technology
Department of Industrial Economics and Management
Structure of the Presentation
Why is this interesting? (Motivation)
Previous Research
Hypotheses (Research Question)
Methodology and Data
Results (Tesing the Hypotheses)
Why is this interesting? (Motivation)
Firm
Firm
Firm
Firm
Firm
Firm
Firm
Firm
Firm
Firm
Firm
Labor Market
Firm
Why is this interesting? (Motivation)
Firm
Firm
Firm
Firm
Firm
Firm
Firm
Firm
Firm
Firm
Firm
Labor Market
Firm
Why is this interesting? (Motivation)
Firm
Firm
Firm
Firm
Firm
Firm
Firm
Firm
Firm
Firm
Firm
Firm
Labor Market
Patenting Firm
Non-Patenting
Firm
Why is this interesting? (Motivation)
Patenting
Firms
Patenting
Firms
Firms
NonPatenting
Firms
Turnover from Firm’s perspective
NonPatenting
Firms
Why is this interesting? (Motivation)
Patenting
Firms
What if the job switching
cross region?
Difference?
Firms
NonPatenting
Firms
Patenting
Firms
NonPatenting
Firms
Why is this interesting? (Motivation)
Patenting
Firms
What if the job switching
cross region?
Firms
NonPatenting
Firms
Patenting
Firms
Difference?
NonPatenting
Firms
Why is this interesting? (Motivation)
Patenting
Firms
Patenting
Firms
Firms
NonPatenting
Firms
Difference?
NonPatenting
Firms
Defined: R&D Workers
Job Function as Professional and Technicians and associate
professional
Tertiary Education worker in Nature, Technical，
Agriculture or Health Science
Total Employment
According to
Swedish
Standard
Classification
of Occupations
(SSYK).
According to
Swedish
Educational
Terminology
(SUN2000).
Defined: R&D Workers
Job Function as Professional and Technicians and associate
professional
Tertiary Education worker in Nature, Technical，
Agriculture or Health Science
Total Employment
According to
Swedish
Standard
Classification
of Occupations
(SSYK).
According to
Swedish
Educational
Terminology
(SUN2000).
Defined: R&D Workers
Support Worker：
• Job Function as
Technicians and associate
professionals (head group
NO.3)
• Hold at least a bachelor
degree or beyond in
Nature, Technical,
Agriculture or Health
Science.
Defined: R&D Workers
Support Worker：
Professional Worker:
• Job Function as
Technicians and associate
professionals (head group
NO.3)
• Hold at least a bachelor
degree or beyond in
Nature, Technical,
Agriculture or Health
Science.
• Job Function as
Professionals (Head
Group No.2)
• Hold at least a bachelor
degree or beyond in
Nature, Technical,
Agriculture or Health
Science.
Defined: R&D Workers
R&D workers
Support
Workers
Professional workers
Stayers
Joiners
from
patenting
firms
Joiners
from non
patenting
firms
Intra-region
Graduate
Other
joiners
Leavers to
patenting
firms
Inter-region
Leavers to
non
patenting
firms
Defined: R&D Workers
R&D workers
Support
Workers
Professional workers
Stayers
Joiners
from
patenting
firms
Joiners
from non
patenting
firms
Intra-region
Graduate
Other
joiners
Leavers to
patenting
firms
Inter-region
Leavers to
non
patenting
firms
Defined: R&D Workers
R&D workers
Support
Workers
Professional workers
Stayers
Joiners
from
patenting
firms
Joiners
from non
patenting
firms
Intra-region
Graduate
Other
joiners
Leavers to
patenting
firms
Inter-region
Leavers to
non
patenting
firms
Defined: R&D Workers
R&D workers
Support
Workers
Professional workers
Stayers
Joiners
from
patenting
firms
Joiners
from non
patenting
firms
Intra-region
Graduate
Other
joiners
Leavers to
patenting
firms
Inter-region
Leavers to
non
patenting
firms
Previous Research
• Almeida and Kogut (1999) : In Silicon Valley, engineers who move
inter-firm are the major patent holder.
• Agrawal and Cockburn et al (2006) : Social relationship stimulate the
knowledge flow.
• Oettl and Agrawal (2008) : The former firm lost the human capital but
receive the knowledge flow from worker’s new firms.
• Kaiser and Kongsted et al (2011) : Between Danish firms, there exist
positive relationship between labor mobility and the firm’s innovative
activity. This relationship is stronger if workers join from innovative
firms.
Hypotheses (Research Question)
• Hypothesis 1: We expect inter firm labor movement of R&D workers
increase the knowledge flow and represented as an increase of the
number of patent application.
• Hypothesis 2: We expect the effect the the labor mobility of R&D
workers who comes or goes to a firm had patent application before, is
stronger.
• Hypothesis 3: We expect the effect the inter-regional labor movement
is stronger, due to the knowledge similarity in same region.
• Estimator: Negative Binomial Regression (Count data)
Methodology


P  AK QL
QL denotes quality-adjusted labor input,
K refers to the physical capital stock.
R


P  exp  ln A   ln K   ln L   r sr 
r 2


Normalizing marginal
productivity for Stayers to one.
 ln A   ln K   ln L   St sSt   J , P sJ , P   J , NP sJ , NP  
P  exp 


  G sG   Su sSu   Oj sOj   L , P sL , P   L , NP sL , NP 

Sub-index St denotes stayers, J,P joiners from patenting firms, J,NP joiners from non-patenting
firms, G joiners from tertiary education, Su support workers, L,P leavers to patenting firms and
L,NP leavers to non-patenting firms, Oj other joiner without former firm’s information, Else the
rest labor.
Pre-sample estimation (1987-2000)
Control FirmSpecific
Heterogeneity in
Innovative
Capacity
Presample
Dummy
Presample
Estimator
Equal to 1 if the firm had
ever innovated during the
pre-sample period.
T
Psi 
P
t 1
i ,t
T
Pt 
Controls
Firm level Controls
Firm Size(Employee/ R&D worker)
Capital Stock
Pre-Sample Controls
Pre-sample Dummy
Pre-sample Estimator
Regional Controls
Industry Dummies
Inter-Region Labor Mobility In
Inter-Region Labor Mobility Out
Intra-Region Labor Mobility
Regional Teri Rate
Density
Ln(Access Measurement)
(12 Industries)
Year Dummies
(8 Year)
Regional Dummies
(72 FA regions)
Data
From 1987, the data include 24,649
observations, 8573 unique firms and
154,642 patent application.
Patent
Application
Data
Contains 1,137,028 firms and 1,214,900
establishments.
Firm Level
Data
Individual
Level Data
•
•
•
•
Exclude firms from public sector
Exclude firms founded during estimation period
Exclude firms without R&D workers
Covers 2001 to 2008
Descriptive Statistics
Firms had no patent
application during
pre-sample period.
Firms had patent
application during
pre-sample period.
All Observations
Observation with pre- Observations without
sample patent
pre-sample patent
Variables
Means
Std. Dev
Means
Std. Dev
Means
Std. Dev
Number of Patent Applications
Firm Size and Capital Stock
0.4
12.5
3.7
40.88
0.01
0.2
Employ
79.8
449.93
326.4
1214.83
54.3
255.83
R&D Relevant worker
7.2
76.34
33.1
230.49
4.6
30.32
Tertiary education worker
13.1
105.50
52.9
308.56
9
48.57
Capital Stock (in Mio, SEK)
60.5
744
267.7
1640
39.3
574
Descriptive Statistics
Firms had no patent
application during
pre-sample period.
Firms had patent
application during
pre-sample period.
All Observations
Observation with pre- Observations without
sample patent
pre-sample patent
Variables
Means
Std. Dev
Means
Std. Dev
Means
Std. Dev
Number of Patent Applications
Firm Size and Capital Stock
0.4
12.5
3.7
40.88
0.01
0.2
Employ
79.8
449.93
326.4
1214.83
54.3
255.83
R&D Relevant worker
7.2
76.34
33.1
230.49
4.6
30.32
Tertiary education worker
13.1
105.50
52.9
308.56
9
48.57
Capital Stock (in Mio, SEK)
60.5
744
267.7
1640
39.3
574
Descriptive Statistics
All Observations
Observation with pre- Observations without
sample patent
pre-sample patent
Variables
Means
Std. Dev
Means
Std. Dev
Means
Std. Dev
R&D Mobility (share of employee)
Joiners from patenting firms
0.002
0.02
0.005
0.02
0.002
0.02
0.001
0.01
0.003
0.02
0.001
0.01
0.0008
0.01
0.002
0.01
0.0007
0.01
0.01
0.07
0.006
0.03
0.01
0.07
0.008
0.06
0.004
0.02
0.009
0.06
0.003
0.02
0.002
0.02
0.003
0.03
Intra-Regional Joiners from
patenting firms
Inter-Regional Joiners from
patenting firms
Joiners from non-patenting firms
Intra-Regional Joiners from nonpatenting firms
Inter-Regional Joiners from nonpatenting firms
Descriptive Statistics
All Observations
Observation with pre- Observations without
sample patent
pre-sample patent
Variables
Means
Std. Dev
Means
Std. Dev
Means
Std. Dev
R&D Mobility (share of employee)
Joiners from patenting firms
0.002
0.02
0.005
0.02
0.002
0.02
0.001
0.01
0.003
0.02
0.001
0.01
0.0008
0.01
0.002
0.01
0.0007
0.01
0.01
0.07
0.006
0.03
0.01
0.07
0.008
0.06
0.004
0.02
0.009
0.06
0.003
0.02
0.002
0.02
0.003
0.03
Intra-Regional Joiners from
patenting firms
Inter-Regional Joiners from
patenting firms
Joiners from non-patenting firms
Intra-Regional Joiners from nonpatenting firms
Inter-Regional Joiners from nonpatenting firms
Descriptive Statistics
All Observations
Observation with pre- Observations without
sample patent
pre-sample patent
Variables
Means
Std. Dev
Means
Std. Dev
Means
Std. Dev
R&D Mobility (share of employee)
Leavers to patenting firms
0.002
0.03
0.004
0.05
0.001
0.02
0.001
0.02
0.003
0.05
0.0008
0.02
0.0006
0.01
0.001
0.01
0.0006
0.01
0.007
0.06
0.006
0.04
0.007
0.06
0.005
0.05
0.003
0.03
0.005
0.05
0.002
0.02
0.002
0.02
0.002
0.03
Intra-Regional leavers to patenting
firms
Inter-Regional leavers to patenting
firms
Leavers to non-patenting firms
Intra-Regional leavers to nonpatenting firms
Inter-Regional leavers to nonpatenting firms
Descriptive Statistics
All Observations
Observation with pre- Observations without
sample patent
pre-sample patent
Variables
Means
Std. Dev
Means
Std. Dev
Means
Std. Dev
R&D Mobility (share of employee)
Leavers to patenting firms
0.002
0.03
0.004
0.05
0.001
0.02
0.001
0.02
0.003
0.05
0.0008
0.02
0.0006
0.01
0.001
0.01
0.0006
0.01
0.007
0.06
0.006
0.04
0.007
0.06
0.005
0.05
0.003
0.03
0.005
0.05
0.002
0.02
0.002
0.02
0.002
0.03
Intra-Regional leavers to patenting
firms
Inter-Regional leavers to patenting
firms
Leavers to non-patenting firms
Intra-Regional leavers to nonpatenting firms
Inter-Regional leavers to nonpatenting firms
Descriptive Statistics
All Observations
Observation with pre- Observations without
sample patent
pre-sample patent
Variables
Means
Std. Dev
Means
Std. Dev
Means
Std. Dev
R&D Mobility (share of employee)
Graduates
0.002
0.02
0.002
0.02
0.002
0.02
Other joiners
0.005
0.04
0.003
0.02
0.005
0.04
Stayers
0.27 High 0.34
0.09
0.17
0.3
0.35
Support workers
Turnover
0.08
0.19
0.04
0.09
0.08
0.20
Different Types of R&D workers
Results-Joiner The number of total R&D workers
Share of Total R&D worker
Different Types of R&D workers
The number of total Employee
Share of Total Employment worker
Patent Application
Patent dummy t-1
Coefficient Coefficient Coefficient Coefficient Coefficient Coefficient
2.280***
2.275***
2.272***
2.318***
2.311***
2.312***
R&D worker share
(Base on Stayer)
Joiners
0.517***
Joiners from patenting firms
Intra-Regional Joiners from patenting
firms
Inter-Regional Joiners from patenting
firms
Joiners from non-patenting firms
Intra-Regional Joiners from nonpatenting firms
Inter-Regional Joiners from nonpatenting firms
1.447***
0.773***
3.083***
1.036***
3.122***
0.308
3.143***
0.284*
0.630
0.171
0.172
0.457*
2.131***
Results-Joiner
Share of Total R&D worker
Share of Total Employment worker
Patent Application
Patent dummy t-1
Coefficient Coefficient Coefficient Coefficient Coefficient Coefficient
2.280***
2.275***
2.272***
2.318***
2.311***
2.312***
R&D worker share
(Base on Stayer)
Joiners
0.517***
Joiners from patenting firms
Intra-Regional Joiners from patenting
firms
Inter-Regional Joiners from patenting
firms
Joiners from non-patenting firms
Intra-Regional Joiners from nonpatenting firms
Inter-Regional Joiners from nonpatenting firms
1.447***
0.773***
3.083***
1.036***
3.122***
0.308
3.143***
0.284*
0.630
0.171
0.172
0.457*
2.131***
Results-Joiner
Share of Total R&D worker
Share of Total Employment worker
Patent Application
Patent dummy t-1
Coefficient Coefficient Coefficient Coefficient Coefficient Coefficient
2.280***
2.275***
2.272***
2.318***
2.311***
2.312***
R&D worker share
(Base on Stayer)
Joiners
0.517***
Joiners from patenting firms
Intra-Regional Joiners from patenting
firms
Inter-Regional Joiners from patenting
firms
Joiners from non-patenting firms
Intra-Regional Joiners from nonpatenting firms
Inter-Regional Joiners from nonpatenting firms
1.447***
0.773***
3.083***
1.036***
3.122***
0.308
3.143***
0.284*
0.630
0.171
0.172
0.457*
2.131***
Results-Joiner
Share of Total R&D worker
Share of Total Employment worker
Patent Application
Patent dummy t-1
Coefficient Coefficient Coefficient Coefficient Coefficient Coefficient
2.280***
2.275***
2.272***
2.318***
2.311***
2.312***
R&D worker share
(Base on Stayer)
Joiners
0.517***
Joiners from patenting firms
Intra-Regional Joiners from patenting
firms
Inter-Regional Joiners from patenting
firms
Joiners from non-patenting firms
Intra-Regional Joiners from nonpatenting firms
Inter-Regional Joiners from nonpatenting firms
1.447***
0.773***
3.083***
1.036***
3.122***
1.308
3.143***
0.284*
0.630
0.171
0.172
0.457*
2.131***
Results-Leaver and Others
Share of Total R&D worker
Share of Total Employment worker
Patent Application
Graduates
Coefficient Coefficient Coefficient Coefficient Coefficient Coefficient
0.150
0.160
0.175
2.002***
2.035***
2.001***
Other Joiners
0.428*
0.421*
0.422*
1.407***
1.337***
1.356***
Support Workers
0.0594
0.0574
0.0562
0.395*
0.386*
0.392*
Leavers
-0.330*
Leavers to patenting firms
Intra-Regional leavers to patenting
firms
Inter-Regional leavers to patenting
firms
Leavers to non-patenting firms
Intra-Regional leavers to nonpatenting firms
Inter-Regional leavers to nonpatenting firms
Non R&D worker
-1.259
-0.261
-0.583
-0.263
-2.561
-0.317
1.900*
-0.379*
-1.753*
-0.631*
-2.671*
-0.0201
-0.324
-0.736*
-0.726*
-0.730*
Results-Leaver and Others
Share of Total R&D worker
Share of Total Employment worker
Patent Application
Graduates
Coefficient Coefficient Coefficient Coefficient Coefficient Coefficient
0.150
0.160
0.175
2.002***
2.035***
2.001***
Other Joiners
0.428*
0.421*
0.422*
1.407***
1.337***
1.356***
Support Workers
0.0594
0.0574
0.0562
0.395*
0.386*
0.392*
Leavers
-0.330*
Leavers to patenting firms
Intra-Regional leavers to patenting
firms
Inter-Regional leavers to patenting
firms
Leavers to non-patenting firms
Intra-Regional leavers to nonpatenting firms
Inter-Regional leavers to nonpatenting firms
Non R&D worker
-1.259
-0.261
-0.583
-0.263
-2.561
-0.317
1.900*
-0.379*
-1.753*
-0.631*
-2.671*
-0.0201
-0.324
-0.736*
-0.726*
-0.730*
Results-Leaver and Others
Share of Total R&D worker
Share of Total Employment worker
Patent Application
Graduates
Coefficient Coefficient Coefficient Coefficient Coefficient Coefficient
0.150
0.160
0.175
2.002***
2.035***
2.001***
Other Joiners
0.428*
0.421*
0.422*
1.407***
1.337***
1.356***
Support Workers
0.0594
0.0574
0.0562
0.395*
0.386*
0.392*
Leavers
-0.330*
Leavers to patenting firms
Intra-Regional leavers to patenting
firms
Inter-Regional leavers to patenting
firms
Leavers to non-patenting firms
Intra-Regional leavers to nonpatenting firms
Inter-Regional leavers to nonpatenting firms
Non R&D worker
-1.259
-0.261
-0.583
-0.263
-2.561
-0.317
1.900*
-0.379*
-1.753*
-0.631*
-2.671*
-0.0201
-0.324
-0.736*
-0.726*
-0.730*
Results-Leaver and Others
Share of Total R&D worker
Share of Total Employment worker
Patent Application
Graduates
Coefficient Coefficient Coefficient Coefficient Coefficient Coefficient
0.150
0.160
0.175
2.002***
2.035***
2.001***
Other Joiners
0.428*
0.421*
0.422*
1.407***
1.337***
1.356***
Support Workers
0.0594
0.0574
0.0562
0.395*
0.386*
0.392*
Leavers
-0.330*
Leavers to patenting firms
Intra-Regional leavers to patenting
firms
Inter-Regional leavers to patenting
firms
Leavers to non-patenting firms
Intra-Regional leavers to nonpatenting firms
Inter-Regional leavers to nonpatenting firms
Non R&D worker
-1.259
-0.261
-0.583
-0.263
-2.561
-0.317
1.900*
-0.379*
-1.753*
-0.631*
-2.671*
-0.0201
-0.324
-0.736*
-0.726*
-0.730*
Results-Leaver and Others
Share of Total R&D worker
Share of Total Employment worker
Patent Application
Graduates
Coefficient Coefficient Coefficient Coefficient Coefficient Coefficient
0.150
0.160
0.175
2.002***
2.035***
2.001***
Other Joiners
0.428*
0.421*
0.422*
1.407***
1.337***
1.356***
Support Workers
0.0594
0.0574
0.0562
0.395*
0.386*
0.392*
Leavers
-0.330*
Leavers to patenting firms
Intra-Regional leavers to patenting
firms
Inter-Regional leavers to patenting
firms
Leavers to non-patenting firms
Intra-Regional leavers to nonpatenting firms
Inter-Regional leavers to nonpatenting firms
Non R&D worker
-1.259
-0.261
-0.583
-0.263
-2.561
-0.317
1.900*
-0.379*
-1.753*
-0.631*
-2.671*
-0.0201
-0.324
-0.736*
-0.726*
-0.730*
Results-Leaver and Others
Share of Total R&D worker
Share of Total Employment worker
Patent Application
Graduates
Coefficient Coefficient Coefficient Coefficient Coefficient Coefficient
0.150
0.160
0.175
2.002***
2.035***
2.001***
Other Joiners
0.428*
0.421*
0.422*
1.407***
1.337***
1.356***
Support Workers
0.0594
0.0574
0.0562
0.395*
0.386*
0.392*
Leavers
-0.330*
Leavers to patenting firms
Intra-Regional leavers to patenting
firms
Inter-Regional leavers to patenting
firms
Leavers to non-patenting firms
Intra-Regional leavers to nonpatenting firms
Inter-Regional leavers to nonpatenting firms
Non R&D worker
-1.259
-0.261
-0.583
-0.263
-2.561
-0.317
1.900*
-0.379*
-1.753*
-0.631*
-2.671*
-0.0201
-0.324
-0.736*
-0.726*
-0.730*
Results-Firm Controls and Pre-Sample Controls
Patent Application
Firm Size and Capital
Stock
Ln(Labor Force)
Ln(Capital Stock)
Share of Total R&D worker
Share of Total Employment worker
Coefficient
Coefficient
Coefficient
Coefficient
Coefficient
Coefficient
0.258***
0.257***
0.259***
0.246***
0.246***
0.246***
(6.87)
(6.83)
(6.87)
(5.84)
(5.86)
(5.84)
0.0571***
0.0573***
0.0574***
0.0542***
0.0538***
0.0546***
(5.70)
(5.66)
(5.61)
(5.11)
(5.04)
(4.98)
0.381***
0.381***
0.383***
0.399***
0.399***
0.401***
(8.14)
(7.98)
(7.90)
(8.05)
(7.95)
(7.78)
2.949***
2.942***
2.943***
3.034***
3.018***
3.020***
(21.58)
(21.42)
(21.28)
(22.18)
(21.91)
(21.63)
Pre-sample variables
Ln(FE)
FE dummy
Conclusion
• Labor Mobility increase the knowledge flow.
• Joiners from patenting firms have stronger effect compare to joiners
from non-patenting firms to innovation activity.
• Inter-regional joiner from patenting firm have a stronger effect
compare to intra-regional joiner to innovation activity.
• Inter-regional joiner from non-patenting firms have a positive effect to
innovation activity..
• Gradates, Other joiners and support workers have positive effects to
innovation activity.
Conclusion
• Inter-regional leaver to patenting firms have a positivity effect but less
significant.
• Leavers to non-patenting firms have a negative effect to innovation
activity.
• Robustness Test shows the result are stable.
Thank you very much.