Does the Mobility of R & D Labor Increase Innovation?

We investigate the effect of mobility of highly skilled workers in Denmark on the total patenting activity of the firms involved for the population of R&D active Danish firms observed between 1999 and 2004. Our study documents how workers joining increase firms patenting activity. The effect is strongest if workers join from patent-active firms. We also find evidence of a positive feedback effect on patenting from workers who have left for another patent-active firm. Summing up the effects of joining and leaving workers, we show that labor mobility increases the total innovative activity of the new and the old employer. Our study thus provides firm-level support for the notion that labor mobility stimulates overall innovation of a country or region.