Knowledge diffusion through employee mobility

April Franco () and Darren Filson ()

No 272, Staff Report from Federal Reserve Bank of Minneapolis

Abstract: In high-tech industries, one important method of diffusion is through employee mobility: many of the entering firms are started by employees from incumbent firms using some of their former employers’ technological know-how. This paper explores the effect of incorporating this mechanism in a general industry framework by allowing employees to imitate their employers’ know-how. The equilibrium is Pareto optimal since the employees “pay” for the possibility of learning their employers’ know-how. The model’s implications are consistent with data from the rigid disk drive industry. These implications concern the effects of know-how on firm formation and survival.

Keywords: Technological innovations; Research and development (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ino and nep-lab
Date: 2000
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Working Paper: Knowledge Diffusion through Employee Mobility (2000)
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