Labor Mobility, Social Network Effects,and Innovative Activity

We study the mapping between labor mobility and industrial innovative activity for thepopulation of R&D active Danish firms observed between 1999 and 2004. Our studydocuments a positive relationship between the number of workers who join a firm and thefirm’s innovative activity. This relationship is stronger if workers join from innovative firms. Wealso find evidence for positive feedback from workers who leave for an innovative firm,presumably because the worker who left stays in contact with their former colleagues. Thisimplies that the positive feedback (“social network effects”) that has been found by otherstudies not only exists but even outweighs the disruption and loss of knowledge occurring tothe previous employer from the worker leaving. Summing up the effects of joining and leavingworkers, we find ample evidence for mobility to be associated with an increase in totalinnovative activity of the new and the old employer....